C G H O NOL ET - Hind Rectifiers Ltd. · NOTICE TO THE MEMBERS NOTICE is hereby given that the 54th...

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HIND RECTIFIERS LIMITED

th54 Annual Report2011-2012

REGISTERED OFFICE : Lake Road,Bhandup (W),Mumbai - 400 078 (India)

WORKS :Mumbai - 400 078. Maharashtra (India)

ii) Plot No.110/111, M.I.D.C. Satpur,Nashik - 422 007. Maharashtra (India)

iii) New Khasra.No.64-67 & 74,Village Charba, Vikas Nagar,Dehradun - 248 197. Uttarakhand (India)

iv) New Khasra.No.295, 296 & 301,Village Charba, Vikas Nagar,Dehradun - 248 197. Uttarakhand (India)

REGIONAL OFFICES

Eastern Region : Chatterjee International Centre11th Floor, Flat No. 13,33-A, J.N. Road, Kolkota - 700 071.

Western Region : Marketing DivisionLake Road, Bhandup (W),Mumbai - 400 078.

Northern Region : 7B/5024, 2nd Floor,N. S. Marg, New Delhi - 110 002.

Southern Region : Anna Mansion,1st Floor, No. 8/1, Avenue Road,Nungambakam, Chennai - 600 034.

BRANCH OFFICES

Bangaluru : No. 199, 1st Floor, 2nd Main H.V.R. Layout,Magadi Road, Near K.H.B. Bus Stop,Bangaluru - 560 079.

Secunderabad : Srinivas Apartment, Plot No.4, Flat No.11st Venture Malla Reddy Nagar,Trirumalgiri Post,Senderabad - 500 015.

i) Lake Road, Bhandup (W),

Contents

Notice to the Members ....................................................................................................................................4

Directors’ Report ............................................................................................................................................8

Report on Corporate Governance....................................................................................................................13

Secretarial Compliance Certificate ..................................................................................................................28

Auditors’ Report ...........................................................................................................................................31

Balance Sheet ..............................................................................................................................................34

Statement of Profit & Loss..............................................................................................................................35

Cash Flow Statement ....................................................................................................................................36

Notes on Financial Statements .......................................................................................................................37

BOARD OF DIRECTORS : S. K. Nevatia, Chairman & Managing Director

Uma S. Nevatia, Executive Vice Chairperson

D. R. Mehta

Niraj Ramkrishna Bajaj

Bharat Swaroop

Pawan Kumar Golyan

V. K. Bhartia

Binod Patodia

Pradeep V. Goyal

Akhil Marfatia

MANAGEMENT TEAM : S. K. Nevatia - Chairman & Managing Director

Uma S. Nevatia - Executive Vice Chairperson

R. C. Chandan - Chief Executive

Saurabh Nevatia - Cheif Executive (Nashik)

A. K. Nemani - Chief Financial Officer

BANKERS : ICICI Bank Limited

Union Bank of India

AUDITORS : M/s Khandwala & Shah

Chartered Accountants

LEGAL ADVISORS : M/s Kanga & Co.

REGISTRAR AND : M/s ADROIT CORPORATE SERVICES PRIVATE LIMITED

TRANSFER AGENT 19, Jafarbhoy Industrial Estate,

1st Floor, Makwana Road, Marol Naka,

Andheri (East), Mumbai - 400 059.

th54 ANNUAL GENERAL MEETING

thDate : 7 August, 2012

Time : 3.30 p.m.

Venue : M. C. Ghia Hall,th4 Floor, Bhogilal Hargovindas Building,

18/20, K. Dubhash Marg, Kala Ghoda,

Mumbai - 400 001.

Cover and Flip Pages : 3 x 130 kVA IGBT BASED AUXILIARY CONVERTER FOR THREE PHASE

LOCOMOTIVE TYPE WAG-9 & WAP-5 AND INTERNAL SCHEMATICS

1

2

HIGHLIGHTS

2011-12 2010-11 2009-10 2008-09 2007-08

INCOME:

1 Gross Operational Income (` in lacs) 12,653.29 10,853.67 7,970.92 10,869.05 11,758.67

2 Net Operational Income (` in lacs) 11,793.96 10,163.88 7,534.46 9,814.86 10,201.06

3 Profit before Finance Costs, (` in lacs) 1,606.08 1,483.76 1,215.28 1,660.21 2,114.45Depreciation & Tax

4 Finance Cost (` in lacs) 158.30 82.10 54.57 81.95 83.87

5 Depreciation (` in lacs) 239.83 239.68 156.40 172.35 140.41

6 Gross Profit after Finance Costs, (` in lacs) 1,207.95 1,161.98 1,004.31 1,405.90 1,890.18Depreciation but before Tax

7 Profit after Tax (` in lacs) 1,068.18 1,014.41 777.41 944.76 1,229.07

8 Dividends (` in lacs) 240.43 225.87 210.81 301.16 150.58

EQUITY SHARE DATA:

9 Sales & other Income per equity Share (`) 78 68 50 65 136

10 Earnings per equity share (`) 7.09 6.74 5.16 6.27 16.32

11 Book value of equity share (`) 41.96 36.72 31.73 28.25 48.57

12 Networth (` in lacs) 6,318.00 5,529.83 4,777.92 4,253.50 3,656.57

13 Market Price :

a) High (`) 56.70 78.95 91.80 188.00 298.25

b) Low (`) 36.00 39.05 33.90 25.60 110.25

14 Dividend (%) 80 75 70 100 100

15 Allotment of Bonus Shares (Ratio) - - - 1:1 -

RATIO:

16 PBT/Net Operational Income (%) 10.24 11.43 13.33 14.32 18.53

17 Profit after Tax/Networth (%) 16.91 18.34 16.27 22.21 33.61

18 Total Liabilities/Total Assets Times 0.39 0.32 0.27 0.35 0.45

19 Total Debt/Equity Times 0.24 0.13 0.08 0.18 0.33

20 Total Outside Liability/Total net worth Times 0.63 0.47 0.37 0.54 0.80

21 Current Ratio Times 2.18 2.52 3.20 2.58 1.99

22 PBDIT/Finance Costs Times 10.15 18.07 22.27 20.26 25.21

3

NOTICE TO THE MEMBERS

thNOTICE is hereby given that the 54 Annual General Meeting of the members of HIND RECTIFIERS LIMITED will be held thon Tuesday the 7 August, 2012 at 3.30 P.M. at M. C. Ghia Hall, 4th Floor, Bhogilal Hargovindas Building, 18/20, K. Dubhash

Marg, Kala Ghoda, Mumbai - 400 001 to transact, with or without modification(s) the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited Balance Sheet as at March 31, 2012, the statement of Profit and Loss for the year ended on that date together with the reports of the Directors and Auditors thereon.

2. To declare Dividend on Equity Shares for the year ended March 31, 2012.

3. To appoint a Director in place of Shri Niraj Bajaj, who retires from office by rotation, and being eligible offers himself for re-appointment.

4. To appoint a Director in place of Shri D. R. Mehta, who retires from office by rotation, and being eligible offers himself for re-appointment.

5. To appoint a Director in place of Shri V. K. Bhartia, who retires from office by rotation, and being eligible offers himself for re-appointment.

6. To appoint M/s. Khandwala & Shah, Chartered Accountants having firm Registration No.: 105069W as Statutory Auditor to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to fix their remuneration.

7. To appoint Branch Auditors for Nashik and Dehradun Plants to hold the office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to fix their remuneration.

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

THE INSTRUMENT APPOINTING A PROXY SHOULD HOWEVER BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY DULY COMPLETED NOT LESS THAN FORTY EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. Corporate members intending to send their authorized representatives to attend the Meeting are requested to send to the Company a Certified True copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the Meeting.

3. In case of joint holders attending the Meeting, only such joint holder who is higher in order of names will be entitled to vote.

4. Brief resume of all Directors proposed to be appointed / reappointed, nature of their expertise in specific functional areas, names of the companies in which they hold directorships, memberships / chairmanships for Board / Committees, shareholding and relationship between directors inter-se as stipulated in Clause 49 of the Listing Agreement with Stock Exchanges in India, are provided in the annexure.

5. The Register of Members and the Share Transfer Books of the Company will remain closed from 02/08/2012 to 07/08/2012 (both days inclusive).

6. The dividend on Equity Shares as recommended by the Board of Directors of the Company, when approved at the thAnnual General Meeting of the Company will be paid on or after 7 August, 2012.

7. Members are hereby informed that dividends which remain unclaimed / unencashed over a period of 7 years has to be transferred by the Company to the Investors Education & Protection Fund, constituted by the Central Government under Section 205(A) & 205(C) of the Companies Act, 1956.

Members should note that no claim can be made by the shareholders for the unclaimed dividends which have been transferred to the credit of the Investors Education & Protection Fund of the Central Government under the amended provisions of section 205(B) of the Companies Act, 1956.

4

The details of dividend paid by the Company and the corresponding due dates for transfer of unencashed dividend to the aforementioned fund constituted by the Central Government are furnished hereunder:

Dividend for the year Date of Declaration of Dividend Due Date of transfer to Education and Protection Fund

2004 - 2005 29.07.2005 28.07.2012

2005 - 2006 30.08.2006 29.08.2013

2006 - 2007 28.07.2007 27.07.2014

2007 - 2008 25.08.2008 24.08.2015

2008 - 2009 10.09.2009 09.09.2016

2009 - 2010 12.08.2010 11.08.2017

2010 - 2011 05.08.2011 04.08.2018

Members who have not encashed the dividend warrant(s) so far in respect of the above financial years, are therefore, requested to make their claims to the Registrar of the Company or the Company at the Registered Office with full details.

8. Members desirous of seeking any information concerning the Accounts of the Company are requested to address their queries in writing to the Company at least seven days before the date of the meeting so that the requested information can be made available at the time of the meeting.

9. Members / Proxies are requested to please bring their copies of the Annual Report to the meeting.

10. The Company has listed its shares on The Bombay Stock Exchange Limited & National Stock Exchange of India Limited.

11. Members holding shares in physical form are requested to notify immediately any change in their address with PIN CODE to the Registrar and Transfer Agent of the Company at the address given below AND in case their shares are held in demat, this information should be passed on directly to their respective Depository Participants and not to the Company.

M/s. ADROIT CORPORATE SERVICES PVT. LTD.[ Unit : Hind Rectifiers Limited ]

19, Jafarbhoy Industrial Estate, 1st Floor, Makwana Road, Marol Naka,

Andheri (East), Mumbai - 400 059. lTel No. : 2859 4060 / 2859 6060 Fax: 2850 3748 E-mail: [email protected]

12. (a) Members are informed that in order to avoid fraudulent encashment of dividend warrants they should send to the Registrar and Transfer Agent of the Company at the address given above under the signature of the Sole/First Joint holder the information relating to Name and Address of the Banker along with the Pin Code Number and Bank Account Number to print on the Dividend Warrants.

(b) Members desirous of availing the facility of Electronic Credit of Dividend are requested to send ECS Form to the Registrar and Transfer Agent of the Company at the address given above.

(c) Members holding shares in dematerialized form and desirous to change or correct the bank account details should send the same immediately to the concerned Depository Participant. Members are also requested to give MICR Code to the Depository Participant.

13. All documents referred to in the notice are open for inspection at the registered office of the Company during office hours on all working days except public holidays between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting.

14. Members/Proxies holding their Shares in Physical mode are requested to fill the enclosed attendance slip and handover the same at the entrance with signature. In the absence thereof, they may not be admitted to the meeting venue.

15. Members who are holding shares in dematerialized form are requested to bring their Client ID and DP ID numbers for easy identification at the meeting.

16. In all correspondence with the Company, members are requested to quote their Folio Number and in case their shares are held in demat form, they must quote their DP ID and Client ID Number.

Registered Office: For and on behalf of the Board of DirectorsLake Road, Bhandup (W), For Hind Rectifiers LimitedMumbai - 400 078.

Place: Mumbai S. K. NevatiathDated: 30 May, 2012

the Investor

Chairman & Managing Director

5

INFORMATION REQUIRED TO BE FURNISHED UNDER THE LISTING AGREEMENT

As required under the Listing Agreement, the particulars of Directors who are proposed to be appointed / re-appointed are as given below:

1. Name : Shri Niraj Bajaj

Age : 59 years

No. of shares held in the Company : 61230

Brief Resume & Functional expertise : Shri Niraj Bajaj, MBA graduate from Harvard University, USA and working with Bajaj Group as a Director and having total experience of more than 30 years.

Outside Directorships : Mukand Ltd.

Bajaj Allianz General Insurance Co. Ltd.

Bajaj Allianz Life Insurance Company Ltd.

Bajaj Auto Ltd.

Hospet Steels Ltd.

Jeewan Ltd.

Kalyani Mukand Ltd.

Mukand Engineers Ltd.

The Hindustan Housing Company Ltd.

Baroda Industries Pvt. Ltd.

Madhur Securities Pvt. Ltd.

Niraj Holdings Pvt. Ltd.

Rahul Securities Pvt. Ltd.

Shekhar Holdings Pvt. Ltd.

Jamnalal Sons Pvt. Ltd.

Bachhraj & Co. Pvt. Ltd.

Sanraj Nayan Investments Pvt. Ltd.

Bajaj Sevashram Pvt. Ltd.

Mahakalp Arogya Pratisthan

Bhoopati Shikshan Pratisthan

Zensar Technologies Ltd.

Chairmanship / Membership of Board Committees : Mukand Engineers Ltd.

2. Name : Shri Vijay Kumar Bhartia

Age : 71 years

No. of shares held in the Company : Nil

Brief Resume & Functional expertise : Shri Vijay Kumar Bhartia, a graduate from Mumbai University and was formerly holding a senior position with Raymond Ltd., and is presently associated with the same company as an Advisor and having total experience of more than 45 years.

Outside Directorships : Rainbow Weavers & Processors Pvt. Ltd.

Uniconnect Sim Pvt. Ltd.

Chairmanship / Membership of Board Committees : Nil

6

3. Name : Shri D. R. Mehta

Age : 77 Years

No. of shares held in the Company : 300

Brief Resume & Functional expertise : Shri D. R. Mehta, M.B.A. from Wharton School of F inance, Univers i ty of Pennsylvania, Philadelphia, USA, has a varied background of more than 40 years experience in overseeing Corporate departments and functions at top Management with a total experience of 55 years.

Outside Directorships : Vivan Investments Pvt. Ltd.

Chairmanship / Membership of Board Committees : Nil

Registered Office: For and on behalf of the Board of DirectorsLake Road, Bhandup (W) For Hind Rectifiers LimitedMumbai - 400 078

Place: Mumbai S. K. NevatiathDated: 30 May, 2012 Chairman & Managing Director

7

DIRECTORS' REPORT TO THE MEMBERS

thYour Directors have great pleasure in presenting 54 Annual Report together with the Audited accounts for the year

ended March 31, 2012.

(` In Lacs)

FINANCIAL RESULTS: Year ended31.03.2012 31.03.2011

Gross Operational Income 12,653.29 10,853.67

Less: Excise Duty / Service Tax 859.33 689.79

Net Operational Income 11,793.96 10,163.88

Gross Profit 1,447.78 1,401.66

Less : Depreciation 239.83 239.68

Profit before tax 1,207.95 1,161.98

Less : Provision for Taxation - Current 244.00 234.00

- MAT Credit Entitlement (88.00) (54.00)

- Deferred (16.85) (29.28)

- For Earlier Years 0.62 (3.15)

139.77 147.57

Profit after taxes 1,068.18 1,014.41

Surplus of previous year 56.10 54.20

Profit available for appropriation 1,124.28 1,068.61

Appropriations :

Transferred to General Reserve 400.00 750.00

Transferred to Reserve for Capital Expenditure 350.00 –

Proposed Dividend 240.93 225.87

Tax on Dividend 39.08 36.64

Surplus Carried to Balance Sheet 94.27 56.10

OPERATIONS:

With the expected increase in productivity and profits in measurable terms the future of the Company looks bright in

the coming years.

The output at Dehradun Plant continues to grow. Plant & Machinery for manufacturing Transformers & repairing old

Transformers for Railways have been installed and the Company has also received clearance from the Research

Design and Standard Organisation (RDSO) to commence the manufacturing operations. The Company expects

marked improvement in production & sales from Dehradun unit.

The output from Nashik Plant has shown a noticeable improvement and we expect a visible measurable performance

in the years to come. Last year, we manufactured Reactors for BHEL, for the first time and we expect more orders of

Reactors for execution from Nashik Plant.stCompany's pending orders booked as on March 31 2012 was at ` 7,365 Lacs, up from ` 4,359 Lacs a year ago.

Company received new orders worth ̀ 14,264 Lacs in the period April 2011 to March 2012.

Company has good pending orders and barring unforeseen circumstances like delay in release of payments, release of

orders and raising of new tenders / enquiries by the Indian Railways, the Company expects healthy growth in sales

turnover.

Year ended

8

We believe that the steady and consistent improvement in our financial performance over the past two years

underscores that we are headed in the right direction and that our strategy is delivering.

In terms of strategic priorities, with a challenging economic environment and a highly competitive market - we have

placed high priority on technology and innovation with focus on competitiveness and therefore a mainstream leader.

Company has exported a Rectifier to South Africa for extrusion of Copper & Cobalt. The Company has bagged an order

from Malaysia for High Current Rectifiers.

Company is laying great stress on the design & development of new products to augment its sales.

In the previous financial year, a small contribution towards sales was made by the following new products.

1) 1550 KVA EMU Transformer

2) 1250 KVA EMU Rectifier

3) 1250 KVA EMU Transformer

In the current year a beginning will be made in adding to the turnover by marketing the following new products:

a) 3 Phase Loco Transformer

b) 3x130 KVA Aux. Converter

c) 3 Phase High Voltage Rectifier

d) Universal Controller

e) HICON controller for Electrostatic Precipitator

f) 1000 KVA Transformer

From the year 2013-14 onwards the Company expects quantum growth in sales from the above new products.

Looking at the big picture, what all this adds up to is our commitment on focusing on driving improvements on all our

key operational parameters.

DIVIDEND:

The Directors are pleased to recommend for consideration of the Shareholders at the Annual General Meeting

payment of dividend @ 80% (` 1.60 per share) amounting to ` 240.93 Lacs for the year ended 31st March, 2012

(previous year ̀ 225.87 Lacs).

TRANSFER TO RESERVE:

In view of the proposed Capital Expenditure to increase the capacity / modernization of the various Plants, Board of

Directors have decided that in addition to transfer a sum of ` 400.00 Lacs to General Reserve a separate reserve

namely called Reserve for Capital Expenditure to be created by way of transfer a sum of ` 350.00 Lacs from current

year's profit.

DEPOSITS:stDeposits amounting to ` 2.25 Lacs due for payment on or before 31 March, 2012 remained unclaimed by the

depositors on that date. Letters have been sent to such depositors reminding them to claim their deposits.

A sum of ̀ 0.75 Lacs has been claimed so far.

BOARD OF DIRECTORS:

As per the Provisions of the Companies Act, 1956 and in terms of the Articles of Association of the Company, Shri Niraj

Bajaj, Shri D. R. Mehta and Shri V. K. Bhartia, Directors of the Company retire by rotation and being eligible, offer

themselves for re-appointment.

9

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that:

1. In the preparation of the annual accounts, the applicable Accounting Standards have been followed.

2. Appropriate policies have been selected and applied consistently and judgments and estimates wherever made

are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,

2012.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance

with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing

and detecting fraud and other irregularities.

4. The annual accounts have been prepared on a going concern basis.

AUDITORS:

M/s. Khandwala & Shah, Chartered Accountants, Auditors of the Company are retiring at the ensuing Annual General

Meeting. They are eligible for re-appointment and have expressed their willingness to act as Auditors, if re-appointed.

The Company has received a certificate from them that they are qualified under section 224 (1B) of the Companies

Act, 1956, for appointment as Auditors of the Company. Members are requested to consider their appointment and fix

their remuneration.

M/s. Daga & Chaturmutha, Chartered Accountants, Branch Auditors of the Company for Nashik Plant are retiring and

eligible for re-appointment and have expressed their willingness to act as Branch Auditors of Company.

M/s. R. Gupta & Associates, Chartered Accountants, Branch Auditors of the Company for Dehradun Plants are retiring

and eligible for re-appointment and have expressed their willingness to act as Branch Auditors of Company.

AUDITORS' OBSERVATIONS:

The observations of the auditors contained in their Report have been adequately dealt with in the Other Notes on

Financial Statements which are self explanatory and therefore, do not call for any further comments.

SECRETARIAL COMPLIANCE REPORT:

As required under the amended provisions of the Companies Act, 1956, the Company is required to obtain Secretarial

Compliance Certificate from a Practicing Company Secretary. The same is enclosed and form part of this report.

DEPOSITORY SERVICES:

The Company's Equity Shares have been admitted to the depository mechanism of the National Securities Depository

Limited (NSDL) and also the Central Depository Services (India) Limited (CDSL). As a result the investors have an

option to hold the shares of the Company in a dematerialised form in either of the two Depositories. The Company has

been allotted ISIN No. INE835D01023.

Shareholders therefore are requested to take full benefit of the same and lodge their holdings with Depository

Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

CORPORATE GOVERNANCE:

Your Company continued to practice good governance as set out by the Securities & Exchange Board of India. In

addition to the basic governance issues, the Board laid a strong emphasis on transparency, accountability and

integrity. The detailed report on compliance of Corporate Governance and Management Discussion Analysis as

stipulated in Clause 49 of the Listing Agreement is enclosed and form part of this Report.

10

CODE OF CONDUCT:

Your Company is committed to conducting its business in accordance with the applicable laws, rules and regulations

and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of

Conduct for adherence by the Directors and Senior Management Personnel of the Company. This will help in dealing

with ethical issues and also foster a culture of accountability and integrity.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNING AND OUTGO:

The information pursuant to section 217 (I) (e) of the Companies Act, 1956 read with the Companies (Disclosure of

particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure “I” to this report.

PARTICULARS OF EMPLOYEES:

Particulars required under section 217(2A) of the Companies Act, 1956 read with the Companies (particulars of

employees) Rules 1975 are given in the prescribed format as an Annexure "II" to the Directors' Report.

LISTING:

The Company has listed its Shares on The Bombay Stock Exchange Ltd. & National Stock Exchange of India Ltd.

The Company is regular in payment of Listing Fees.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION:

The Company has taken all the necessary steps for safety and environmental control and protection at the plant.

ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Company's shareholders, customers, suppliers, bankers,

distributors and all the technology partners for the support they have given to the Company and the confidence, which

they have reposed in its management and the employees for the commitment and dedication shown by them.

Registered Office: For and on behalf of the Board of Directors

Lake Road, Bhandup (W), For Hind Rectifiers Limited

Mumbai - 400 078.


11

ANNEXURE "I" TO THE DIRECTORS' REPORT

Information under section 217(1)(e) of the Companies Act, 1956 with the Companies (Disclosures of particulars in the

Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended st31 March, 2012.

I. CONSERVATION OF ENERGY

1. Regular audit is being conducted to identify areas of energy wastage.

II. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

1. 1250 KVA EMU Transformers developed and supplied to Indian Railways.

2. 3 Phase Loco Transformers is in advanced stage of manufacturing for supply to Indian Railways.

3. 1250 KVA EMU Rectifiers successfully developed and supplied to Indian Railways.

4. 3 Phase Transformers for Electro Static Precipitators developed.

5. Electro Static Precipitator Transformers for wide temperature operating range (-20 °C to 55 °C) hermetically

sealed construction with H.V. Bushing designed and manufactured as per international standards.

6. Developed New Communication Daughter Board in ACE Controller for communicating upto 99 ACE

controller.

7. Technology Transfer Agreement signed for manufacturing of 25 KVA S.S.EMU Power Supply for Indian

Railways.

III. FOREIGN EXCHANGE EARNING AND OUTGO

To avoid repetition, Members are kindly requested to refer Note Nos. xxii to xxv to the Other Notes on Financial

Statements where such information is furnished.

Registered Office: For and on behalf of the Board of Directors Lake Road, Bhandup (W), For Hind Rectifiers LimitedMumbai - 400 078.


12

REPORT ON CORPORATE GOVERNANCE

CORPORATE GOVERNANCE AND STATEMENT ON COMPANY'S PHILOSOPHY ON CODE OF

GOVERNANCE:

Corporate Governance is a set of systems and practices to ensure that the affairs of the Company are being managed

in a way which ensures accountability, transparency and fairness in all its transactions in the widest sense and meet its

stakeholders’ aspirations and social expectations. Good Corporate Governance practices stem from the culture and

mindset of the organization.

Hind Rectifiers Limited is committed to adhere to the Corporate Governance Code as prescribed by the SEBI and has

accordingly implemented various aspects of the code. Company is also committed to meet the aspiration of the

stakeholders.

Company's philosophy is to constantly improve and create sustainable value through ethical business conduct. It

envisages attainment of the highest level of transparency, accountability and equity in all facets of its operations and

all its interactions with shareholders, employees, lenders and regulatory bodies.

The Corporate Governance structure in the Company assigns responsibilities and entrusts authority among different

participants in the organization viz. the Board of Directors, the senior management, employees, etc. The Company's

focus revolves around values based on transparency, integrity, professionalism and equity.

BOARD OF DIRECTORS:

The Company presently has ten Directors. There are two Executive Directors, one is Chairman & Managing Director

and the other is Executive Vice Chairperson. There are three Non Independent Non Executive Directors. The

remaining five Non Executive Directors are Independent Directors and professionals with expertise and experience in

general corporate management, finance and other allied fields.

As per clause 49 of the Listing Agreement, the Board should have an optimum combination of both Executive and Non

Executive Directors. The Board of your Company has four fifth of the Directors as Non Executive Directors. Five out of

the eight Non Executive Directors are Independent Directors which is equal to one half of the total size of the Board.

Composition of the Board of Directors has a healthy mix of Executive and Non Executive Directors and ensures the

desired level of independence and functioning and decision making.

The details of composition of the Board, category, attendance of Directors at Board Meetings during the financial year

and last Annual General Meeting, number of other Directorships and other Committee Memberships are given below:

Name of the Director Category No. of Other Outside CommitteeDirectorships held position held

(excluding Private & as on 31.03.2012Foreign Companies)

Member Chairmanas on 31.03.2012

Shri S. K. Nevatia Non Independent –(Chairman & Managing ExecutiveDirector)

Smt. Uma Nevatia Non Independent – – –(Executive Vice Chairperson) Executive

Shri D. R. Mehta Independent Non – – –Executive

Shri Niraj Ramkrishna Bajaj Non Independent 10 1 –Non Executive

Shri Bharat Swaroop Non Independent 1 – –Non Executive

Shri Pawan Kumar Golyan Non Independent – – –Non Executive

– –

13

Name of the Director Category No. of Other Outside CommitteeDirectorships held position held

(excluding Private & as on 31.03.2012Foreign Companies)

Member Chairmanas on 31.03.2012

Shri V. K. Bhartia IndependentNon Executive

Shri Binod Patodia Independent 5 – –Non Executive

Shri Pradeep Goyal Independent 4 5 3Non Executive

Shri Akhil Marfatia Independent 1 – –Non Executive

BOARD MEETING:

The Board of Directors met 5 times during the financial year 2011 - 2012 i.e. on 11.04.2011, 30.05.2011, 05.08.2011,

14.11.2011 and 13.02.2012.

The maximum time gap between any two meetings is much less compared to the requirement of not more than four

months as specified in clause 49. The dates and timings of the meetings were decided well in advance.

The details of attendance of Directors at Board Meetings held during the financial year 2011-2012 and at the last

Annual General Meeting held on 05.08.2011 are as follows:

NO. OF BOARD MEETINGS HELD - 5

Name of the Director No. of Board Meetings held No. of Board Whetherduring the tenure of the Meetings attended lastDirector in 2011 - 2012 Attended AGM

Shri S. K. Nevatia 5 5 Yes

Smt. Uma S. Nevatia 5 4 Yes

Shri D. R. Mehta 5 4 Yes

Shri Niraj Ramkrishna Bajaj 5 1 Yes

Shri Bharat Swaroop 5 4 Yes

Shri Pawan Kumar Golyan 5 1 Yes

Shri V. K. Bhartia 5 5 Yes

Shri Binod Patodia 5 3 Yes

Shri Pradeep Goyal 5 3 No

Shri Akhil Marfatia 5 4 Yes

INFORMATION SUPPLIED TO THE BOARD:

The Board has complete access to all information with the Company.

All Board meetings are governed by a structured agenda which is backed by comprehensive background information.

The following information is regularly provided to the Board, as part of the agenda papers well in advance of the Board

meetings, or is tabled in the course of the Board meeting.

- Detailed Business Review.

- Annual operating plans and budgets and any update thereof.

- Capital budgets and any updates thereof.

- Quarterly results for the Company and its operating divisions and business segments.

– – –

14

- Minutes of the meetings of the Audit Committee and other Committees of the Board.

- Information on recruitment and remuneration of Senior Officers just below the level of Board, including the

appointment or removal of Chief Financial Officer and Company Secretary.

- Materially important show cause, demand, prosecution notices and penalty notices.

- Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.

- Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by

the Company.

- Details of any joint venture or collaboration agreement.

- Information for development of new products, new technology etc.

- Transactions that involve substantial payment towards goodwill, brand equity or intellectual property and any

other acquisition.

- Significant development on Human Resources / Industrial Relations front, like signing of wage agreement,

implementation of voluntary retirement scheme etc.

- Sale of material, nature of investments, subsidiaries, assets, which is not in the normal course of business.

- Foreign exchange exposures and steps taken by the Management to limit the risks of adverse exchange rate

movement, if material.

- Non-compliance of any regulatory, statutory nature or listing requirements and shareholders' service, such as

non-payment of dividend, delay in share transfer etc.

- Details of investment of surplus funds available with the Company.

- Details of commercial dealings by firms/ companies in which members of the Board / senior management or their

relatives hold shares with the Company.

- Any materially, significant effluent or pollution problem.

- Any issue which involves possible public or product liability claims of a substantial nature.

- Detailed status on the business risks being faced by the Company and their mitigation plan.

- Details of transactions with Related Parties.

The Board is routinely presented with all information under the above heads whenever applicable and materially

significant.

As mandated by the revised Clause 49, the Independent Directors on the Board of the Company.

lApart from receiving Director's fees, do not have any material pecuniary relationships or transactions with the

Company, its promoters, its Directors, its senior management or its holding Company, its subsidiaries and

associates that may affect independence of the Director.

lAre not related to promoters or persons occupying management positions at the Board level or at one level below

the Board.

lHave not been an executive of the Company in the immediately preceding three financial years.

lAre not partners of the firm or executives of the Company or were not partners of the firm or executives of the

Company during the preceding three years.

lStatutory audit firm or the internal audit firm that is associated with the Company.

lLegal firm(s) and consulting firm(s) that have a material association with the Company.

lAre not material suppliers, service providers or customers or lessors or lessees of the Company, which may affect

independence of the Director.

lAre not substantial Shareholders of the Company i.e. do not own two percent or more of the block of voting

shares.

lAre not less than 21 years of age.

15

COMMITTEES OF DIRECTORS:

For better Corporate Governance, promoting transparency and for enhancing the credibility of the financial disclosures

of the Company, the Board has constituted Committees which conform to the requirements of clause 49 of the Listing

Agreement with the Stock Exchange and Companies Act, 1956.

Details of the committee of the Board and other related information are as follows:

AUDIT COMMITTEE:

The Company has an Audit Committee at the Board level with the powers and the role that are in accordance with

Clause 49 II [C] and [D] of the Listing Agreement.

The broad terms of reference of the Audit Committee are in consonance with the provisions of Section 292A of the

Companies Act, 1956 and Clause 49 of the Listing Agreement. The Audit Committee comprises of three Independent

Directors.

The Committee acts as a link between the Management, the Statutory Auditors and the Board of Directors of

the Company. The Committee focuses its attention on monitoring the financial reporting system within the Company,

considering Quarterly & Annual Financial Results of the Company and submitting its observations to the Board of

Directors before its adoption by the Board, review of the internal audit report & internal control system, audit

methodology and process, major accounting policies and practice, compliance with accounting standards. Committee

also reviews the legal compliance reporting system.

Shri S. K. Nevatia, Chairman & Managing Director, Shri R. C. Chandan, CEO and Shri A. K. Nemani, CFO of the Company

are permanent invitees to the Audit Committee Meeting. In addition to this representative of the statutory & internal

auditors and other executives as are considered necessary attend these meetings.

The Committee met Four times during the year on 30.05.2011, 05.08.2011, 14.11.2011 and 13.02.2012.

Attendance record at the meetings of the Audit Committee of Directors during financial year 2011 - 2012:

NO. OF MEETINGS HELD - 4

Name of Committee Members Position No. of Meetings Meetings held attended

Shri V. K. Bhartia, Chairman Independent Non Executive 4 4

Shri D. R. Mehta Independent Non Executive 4 3

Shri Pradeep Goyal Independent Non Executive 4 2

REMUNERATION COMMITTEE: thThe Company has constituted Remuneration Committee (being a non-mandatory requirement) on 30 August, 2003

and has been reconstituted from time to time. The Committee reviews and approves the Salaries, Commission, Perks

and other employment conditions for the Directors.

Present composition of the Remuneration Committee is as under:

Name of Committee Members Position

Shri V. K. Bhartia, Chairman Independent Non Executive

Shri Binod Patodia Independent Non Executive

Shri D. R. Mehta Independent Non Executive

During the year ended March 31, 2012, No meeting of the Committee was held.

SHAREHOLDERS' & INVESTORS' GRIEVANCE COMMITTEE:

The Company has constituted a Shareholders' & Investors' Grievance Committee on April 18, 2007 at Board level to

strengthen the investor relations and to inter-alia look into issues relating to Shareholder Grievances pertaining to

transfer of shares, non receipt of declared dividends, non receipt of Annual Report, issues concerning de-

materialisation etc.

16

Shri A. K. Nemani, Chief Financial Officer, is designated as the Compliance Officer.

The Company has designated the e-mail ID ‘[email protected]’ exclusively for the purpose of registering

complaints by investors electronically. This e-mail ID is displayed on the Company's website i.e. www.hirect.com

The following table shows the nature of complaints received from the shareholders during the year 2011-2012.

Nature of complaints No. of complaints receivedduring the year 2011 - 2012

Non receipt of Dividend Warrant 4

Non receipt of Annual Report 2

Non receipt of Share Certificate 0

stThere were no complaints pending as on 31 March, 2012.

Attendance record at the meetings of the Shareholders' Grievance Committee of Directors during financial year

2011 - 2012:

NO. OF MEETINGS HELD - 2

Name of Committee Members Position No. of Meetings Meetingsheld attended

Shri V. K. Bhartia, Chairman Independent Non Executive 2 2

Shri D. R. Mehta Independent Non Executive 2 1

Shri Pradeep Goyal Independent Non Executive 2 1

REMUNERATION OF DIRECTORS:

The Managing / Executive Directors are paid remuneration as per their respective terms of appointment as approved

by the Shareholders.

Non Executive Directors do not draw any remuneration from the Company except the Sitting Fees for attending the

meetings of the Board / Board Committee.

The details of remuneration / sitting fees paid during the financial year 2011-2012 to the Directors of the Company are

as under:

(` In Lacs)

Name of the Director Salary Benefits Bonus / Sitting TotalCommission Fees

Shri S. K. Nevatia 24.00 14.46 26.21 – 64.67

Smt. Uma S. Nevatia 12.90 4.25 – – 17.15

Shri D. R. Mehta – – – 0.40 0.40

Shri Niraj Ramkrishna Bajaj – – – 0.08 0.08

Shri Bharat Swaroop – – – 0.25 0.25

Shri Pawan Kumar Golyan – – – 0.08 0.08

Shri V. K. Bhartia – – – 0.57 0.57

Shri Binod Patodia – – – 0.20 0.20

Shri Pradeep Goyal – – – 0.35 0.35

Shri Akhil Marfatia – – – 0.25 0.25

The tenure of office of the Shri S. K. Nevatia, Chairman & Managing Director is for a period of three years and

Smt. Uma S. Nevatia, Executive Vice Chairperson is for a period of five years from the date of appointment. There is no

provision for payment of severance fees.

During the period under review, none of the Directors were paid any performance linked incentive.

17

SHAREHOLDING OF NON EXECUTIVE DIRECTORS:

The shareholding in the Company by the Non Executive Directors are as under:

Sr. No. Name of the Director No. of shares held

1. Shri D. R. Mehta 300

2. Shri Niraj Ramkrishna Bajaj 61230

3. Shri Bharat Swaroop 15500

4. Shri Pawan Kumar Golyan –

5. Shri V. K. Bhartia –

6. Shri Binod Patodia –

7. Shri Pradeep Goyal –

8. Shri Akhil Marfatia –

CODE OF CONDUCT:

The Company has adopted a Code of Conduct for the Directors and senior management of the Company. The

members of the Board and senior management of the Company have submitted their affirmation on compliance with

the code for the effective period. The Declaration by the Chairman and Managing Director to that effect forms part of

this Report.

MANAGEMENT DISCUSSIONS & ANALYSIS:

Management discussion and analysis report is given in a separate section forming part of the Directors' Report in this

annual report.

STEPS FOR PREVENTION OF INSIDER TRADING:

In compliance of the SEBI (Prevention of Insider Trading) Regulations as amended in 2002, the Company has issued

comprehensive guidelines advising and cautioning management staff and other relevant business associates on the

procedure to be followed while dealing in equity shares of Hind Rectifiers Ltd. and disclosure requirements in this

regard. Company believes that “The Code of Internal Procedure and Conduct” and “The Code of Corporate Disclosures

Policies” framed by it in this regard will help in ensuring compliance of the amended SEBI regulations.

DISCLOSURES:

The necessary disclosures regarding the transactions entered into with the related parties are given in the Other Notes

on Financial Statements. There were no transactions of the material value with related parties viz., Promoters,

Directors or the Management or Relatives having any potential conflict with the interest of the Company.

NON-COMPLIANCES:

There were no instances of non-compliance on any matter related to the capital market during the last three years. No

penalties or strictures were imposed on the Company by any Stock Exchange or SEBI or any other statutory authority

on any matter related to capital market during last three years.

DETAILS OF COMPLIANCE WITH MANDATORY REQUIREMENT AND ADOPTION OF NON MANDATORY

REQUIREMENT.

The Company has complied with all mandatory requirement of Clause 49 of the Listing Agreement with the Stock

Exchange and has implemented the following non mandatory requirements:

1. Remuneration Committee:

The Company has a Remuneration Committee to review and approve the salary, commission, perks and other

employment conditions for the Directors.

18

2. Audit Qualification:

It is always the Company's endeavour to present unqualified financial statements. There are no audit

qualifications in the Company's financial statement for the year under review.

3. Training of Board Members:

Directors are fully briefed about all business related matters, risks assessment, market conditions of the product

manufactured by the Company, competition and new initiative proposed by the Company.

MEANS OF COMMUNICATION:

1. Quarterly results are published in prominent daily newspapers in English and Regional Language.

2. The Company has its own website i.e www.hirect.com. All the vital information relating to the Company including

the Quarterly & Annual financial results and its products are displayed on the web site.

CEO / CFO CERTIFICATION:

As required under Clause 49 of the Listing Agreements, a Certificate duly signed by Shri S. K. Nevatia, Chairman &

Managing Director (CMD) & Shri A. K. Nemani, Chief Financial Officer (CFO) has been obtained. The certificate is

annexed to this report.

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE:

The Company has obtained a certificate from Auditors of the Company regarding compliance with the provisions

relating to the corporate governance laid down in clause 49 of the listing agreement with the Stock Exchanges. This

certificate is annexed to the report.

For and on behalf of the Board of DirectorsFor Hind Rectifiers Ltd.


19

SHAREHOLDER INFORMATION:

th54 ANNUAL GENERAL MEETING thDAY & DATE : Tuesday, 7 August, 2012

TIME : 3.30 P. M.thVENUE : M. C. Ghia Hall, 4 Floor,

Bhogilal Hargovindas Building,

18/20, K. Dubhash Marg,

Kala Ghoda, Mumbai - 400 001

GENERAL BODY MEETINGS:

The last three Annual General Meetings were held as under:

AGM Financial Year Date Time Venuest51 AGM 31.03.2009 10.09.2009 3.30 P.M. Kamalnayan Bajaj Hall & Art Gallery, Gr. Floor,

Bajaj Bhavan, Nariman Point, Mumbai - 400 021.nd52 AGM 31.03.2010 12.08.2010 3.30 P.M. -- As above -- rd th53 AGM 31.03.2011 05.08.2011 3.30 P.M. M.C. Ghia Hall, 4 Floor, Bhogilal Hargovindas Building,

18/20, K. Dubhash Marg, Kala Ghoda, Mumbai - 400 001.

All the matters as set out in the respective notices were passed by the Shareholders. The summary of the special

resolution and other important resolutions passed at the last three Annual General Meeting and status of implementation

thereof is reproduced below. No special resolution was required to be put through postal ballot last year.

st51 AGM

No Special Resolution was passed.

nd52 AGM

Sr. No. Subject matter of the Resolutions Type of Resolution Status of

implementation

1. Re-appointment of Shri S. K. Nevatia as Special Implemented

Chairman & Managing Director of the Company

2. Re-appointment of Smt. Uma S. Nevatia as Special Implemented

Executive Vice Chairperson of the Company

rd53 AGM

Sr. No. Subject matter of the Resolutions Type of Resolution Status of

implementation

1. Appointment of Shri Akhil Marfatia as Ordinary Implemented

a Director of the Company

2. Creation of Mortgage Ordinary Implemented

3. Appointment of Shri Suramya Nevatia as Special Implemented

an Assistant General Manager

FINANCIAL CALENDAR:

* Financial year 2012 - 2013 : April 1, 2012 to March 31, 2013

* Financial reporting for the quarter ended June 30, 2012 : Before August 15, 2012

* Financial reporting for the quarter ended Sept.30, 2012 : Before November 15, 2012

* Financial reporting for the quarter ended Dec. 31, 2012 : Before February 15, 2013

* Financial reporting for the year ended March 31, 2013 : Audited Results by end of May, 2013

20

DATE OF BOOK CLOSURE: 02/08/2012 to 07/08/2012 [Both days inclusive].

DIVIDEND PAYMENT DATE: On or after 7th August, 2012.

PAYMENT OF DIVIDEND:

Dividend will be paid by "Account Payee" / Non negotiable instrument or through Electronic Clearing Service (ECS) as

notified by the SEBI through Stock Exchanges. The Company had already written to all the shareholders setting out in

details, the procedure to be followed for availing this facility. In view of the advantage of receiving dividend through

ECS, shareholders are requested to opt for this mode. The declared dividend is usually paid by the Company within 3

working days.

SHARE TRANSFER SYSTEM:

Share Transfer Requests are received at the registered office of the Company as well as directly at RTA’s office. RTA

does the verification and processing of documents. In order to comply with the requirement of SEBI circular No.

SMD/POLICY/CIR-10/02 dated May 7, 2002 to effect transfer of shares within one month, the Share Transfer

Committee has been authorised to process, approve and effect transfer of shares on behalf of the Company at

fortnightly intervals. The share certificates duly endorsed for transfer are returned to shareholders within stipulated

time of 30 days.

REGISTRAR & TRANSFER AGENT:

In terms of SEBI Circular No.D&CC/FITTC/CIR-15/2002 dated December 27, 2002 read with Circular No.D&CC/FITTC/

CIR-18/2003 dated February 12, 2003, on appointment of common agency for share registry work, the Company has

appointed the below mentioned agency as Registrars and Share Transfer Agent (RTA) for both physical and demat

segment of Equity Shares of the Company.

M/S. ADROIT CORPORATE SERVICES PVT. LTD.

[ Unit : Hind Rectifiers Limited ]

19, Jafarbhoy Industrial Estate, 1st Floor,

Makwana Road, Marol Naka,

Andheri (East), Mumbai - 400 059

Tel : 28594060 / 28596060 Fax : 28503748

Email : [email protected]

COMPLIANCE OFFICER:

Shri A. K. Nemani, Chief Financial Officer

ADDRESS FOR CORRESPONDENCE:

HIND RECTIFIERS LIMITED

Lake Road, Bhandup (West),

Mumbai - 400 078.

E-mail: [email protected]

Telephone No. 25696789

LISTING ON STOCK EXCHANGES:

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai and National Stock

Exchange of India Limited.

Listing fees has been paid to above Stock Exchanges for the year 2011 - 2012.

STOCK CODE:

Bombay Stock Exchange Limited, Mumbai : 504036

National Stock Exchange of India Ltd. : HIRECT

Demat ISIN : INE835D01023

21

22

DEMATERIALISATION OF SHARES:

As on March 31, 2012, 1,18,31,200 Shares representing 78.57% of total Equity Shares were held in dematerialised

form with NSDL and CDSL.

Member can hold shares in electronic forms and trade the same in Depository System. However, they may hold the

same in physical form also.

STOCK PRICE DATA:

Monthly High / Low Market Price of Equity Shares of Hind Rectifiers Ltd., during the Financial Year 2011 - 2012:

Month BSE NSE

High Low High Low

April, 2011 49.70 40.80 49.80 40.75

May, 2011 49.50 40.55 49.90 40.10

June, 2011 54.60 45.00 54.45 44.65

July, 2011 56.35 47.80 56.65 47.55

August, 2011 52.50 38.25 52.80 39.00

September, 2011 48.45 40.80 49.70 40.55

October, 2011 46.00 40.70 46.15 40.00

November, 2011 47.20 38.00 47.25 38.25

December, 2011 44.90 36.00 44.90 36.80

January, 2012 49.80 37.65 50.00 37.30

February, 2012 56.70 45.70 55.50 46.05

March, 2012 53.00 37.50 52.10 38.25

RELATIVE PERFORMANCE OF HIND RECTIFIERS SHARES VERSUS BSE SENSEX:

RELATIVE PERFORMANCE OF HIND RECTIFIERS SHARES VERSUS NSE SENSEX:

0.00

10.00

20.00

30.00

40.00

50.00

60.00

Apr'11 May'11 Jun'11 Jul'11 Aug'11 Sep'11 Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12

BSE Index

HRL Price

23

SHAREHOLDING PATTERN AS ON MARCH 31, 2012:

Category No. of shares held % of shareholding

Promoters & Associates 65,78,321 43.69

Mutual Funds & UTI 1,500 0.01

Banks / Financial Institutions 10,500 0.07

Private Bodies Corporate 4,49,989 2.99

NRI/OCBs 25,36,842 16.84

Others 54,80,778 36.40

Total 1,50,57,930 100.00

DISTRIBUTION OF SHAREHOLDING AS ON MARCH 31, 2012:

No. of Equity Shares held No. of Shareholders No. of Shares held % of Equity Capital

Upto 500 5,909 9,21,336 6.12

501-1000 724 5,79,122 3.85

1001-2000 499 7,55,171 5.01

2001-3000 191 5,21,321 3.46

3001-4000 44 1,55,991 1.04

4001-5000 52 2,44,013 1.62

5001-10000 73 5,24,872 3.49

10001 & above 76 1,13,56,104 75.41

Total 7,568 1,50,57,930 100.00

NOMINATIONS:

Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the

shares shall be transferable in the case of death of all the registered shareholder/s. Nomination facility in respect of

shares held on electronic form is also available with the Depository Participant (DP) as per the bye-laws and business

rules applicable to NSDL & CDSL.

PLANT LOCATIONS:

a. Lake Road, Bhandup (W), Mumbai - 400 078. Maharashtra

b. Plot No.110/111, M.I.D.C., Satpur, Nashik - 422 007. Maharashtra

c. New Khasra.No.64-67 & 74, Village Charba, Vikas Nagar, Dehradun - 248 197. Uttarakhand

d. New Khasra.No.295, 296 & 301, Village Charba, Vikas Nagar, Dehradun - 248 197. Uttarakhand

DECLARATION:

I, Sushil Kumar Nevatia, Chairman & Managing Director of Hind Rectifiers Limited hereby affirm and declare, to the

best of my knowledge and belief, and on behalf of the Board of Directors of the Company and senior management

personnel, that:

The Board of Directors has laid down a code of conduct for all Board members and senior management of the

Company.

The code of conduct has been complied with.

Registered Office: For and on behalf of the Board of DirectorsLake Road, Bhandup (W) For Hind Rectifiers Ltd.Mumbai - 400 078.

Place: Mumbai S. K. NevatiathDate : 30 May, 2012 Chairman & Managing Director

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

Auditors' Certificate regarding compliance of conditions of Corporate Governance under Clause 49 of the Listing

Agreement

To the Members of Hind Rectifiers Limited

We have examined the compliance of conditions of corporate governance by Hind Rectifiers Limited ('the stCompany'), for the year ended 31 March, 2012, as stipulated in Clause 49 of the Listing Agreement of the said

Company with stock exchanges in India.

The compliance of conditions of corporate governance is the responsibility of the Company's management. Our

examination was carried out in accordance with the "Guidance Note on Certification of Corporate Governance (as

stipulated in Clause 49 of the Listing Agreement)", issued by the Institute of Chartered Accountants of India and was

limited to procedures and implementation thereof, adopted by the Company, for ensuring the compliance of the

conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements

of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the

Company has complied with the conditions of Corporate Governance as stipulated in the abovementioned Listing

Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the

efficiency or effectiveness with which the management has conducted the affairs of the Company.

For and on behalf ofKHANDWALA & SHAH,

Chartered Accountants,(Registration No.105069W)

(UDAY J. SHAH)Place: Mumbai Partner

stDated: 31 May, 2012 Membership No. 033038

24

CEO / CFO CERTIFICATION:

The Board of Directors

Hind Rectifiers Limited,

Mumbai

Re: Financial Statements for the year 2011 - 2012 - Certification by CEO & CFO

We, Sushil Kumar Nevatia, Chairman & Managing Director and A. K. Nemani, Chief Financial Officer of Hind Rectifiers

Ltd., hereby certify that:

(a) We have reviewed Financial Statements and the Cash Flow Statement for the financial year ended March 31,

2012 and to the best of our knowledge and belief:

i. these statements do not contain any materially untrue statement or omit any material fact or contain

statements that might be misleading.

ii. these statements together present a true and fair view of the Company's affairs and are in compliance with

existing accounting standards, applicable laws and regulations.

(b) They are, to the best of our knowledge and belief, no transactions entered into by the Company during the

period, which are fraudulent, illegal or violative of the Company's code of conduct.

(c) We are responsible for establishing and maintaining internal controls for financial reporting and that we have

evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and

we have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal

controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these

deficiencies.

(d) We have indicated to the Auditors and the Audit Committee that:

i. there have been no significant changes in internal control over financial reporting during the year;

ii. there have been no significant changes in accounting policies during the year; and

iii. there have been no instances of significant fraud except fraud referred in note no.(xiv) of the Other Notes

on Financial Statements, of which we have become aware and the involvement therein, if any, of the

management or an employee having a significant role in the Company's internal control system over

financial reporting.

Place: Mumbai S. K. Nevatia A. K. NemanithDate: 30 May, 2012 Chairman & Managing Director Chief Financial Officer

25

MANAGEMENT DISCUSSION AND ANALYSIS

Indian Industry Scenario:

In recent times, the economic crisis and its repercussions have accelerated and exposed a fragile world with high volatility and socio-political tensions.

In addition, growing consumption demand in emerging markets is driving up commodity prices, both crude oil and other raw materials which are expected to impede the economic recovery in the medium to long term.

The major challenges besetting are managing the increasing competition, improving productivity in the wake of growing skill mismatches, non-inclusive growth and above all, a looming economic uncertainty and socio-political fragility.

The year 2011 - 2012 saw sustained increase in the prices of major inputs and raw materials leading to increasing costs and pressures on margins.

The low growth phenomenon has continued with developed economies of Western world. They are grappling with problems like high borrowings and likely sovereign default in European countries and if these were to happen, it would be catastrophic as many international commercial banks have exposure to European countries.

Company Scenario:

India's environment (anti-pollution) industry is projected to grow dramatically in the coming years. The Indian Railways are also projecting significant growth in the years to come as per their vision 2020 document.

Today, the need for your Company's product is even more intensifying and continued deployment of these products will allow Company to full-fill its objective of meaningfully addressing the environmental issues being faced by the nation.

The output at Dehradun Plant continues to increase. Plant & Machinery required for manufacturing Transformers have been installed and the Company has also received clearance from the Research Design and Standard Organisation (RDSO) to commence the manufacturing operations. The Company expects marked improvement in production & sales from Dehradun unit.

Flexible and Scalable Business Model:

We believe that the flexibility and scalability of our existing production facilities and distribution network will help us meet the increased demand for our products. Our presence in India with four manufacturing plants provides us a low cost manufacturing base. The scalability of our existing facilities enables us to increase our production capacity through the installation of new equipment and production lines. Our manufacturing facilities enable us to produce a wide range of products with different specifications. This helps us in meeting the demands of our customers and reduces the impact of uncertainties in production volumes for specific products.

Opportunities & Threats:

We have a strong brand and leadership position in our business in India. We hope to continue this growth by developing new products and expanding into new growth products and markets with continued emphasis on the current customer value chain.

We also plan to enhance our distribution reach by adding new dealers and distributors to penetrate the Indian and international markets. We believe this will further diversify our revenues to insulate our sales from adverse business conditions.

Our goal is to leverage our strengths to continue to expand our capacities in each of our respective business lines and expand into complementary product lines to continue our growth in India and to compete in the global market.

We are high-quality producer with focus on cost competitiveness. We have invested and we continue to invest in advanced equipments which provide us with consistent and cost effective production rapidly while maintaining quality.

Delays in Government decision / spending are the potential threats to the otherwise optimistic picture for the future of the Company. Low cost and low quality manufacturers continue to twist healthy markets. Volatile foreign currencies and volatility in prices of raw material are dampening factors on growth.

Outlook:

The Company has successfully continued to bid and get large tenders from Indian Railways and is considered as a preferred supplier with very encouraging revenues, barring unforeseen circumstances like delay in release of payments, release of orders and raising of new tenders / enquiries by the Indian Railways, the Company expects healthy growth in sales turnover.

Risks, Concerns, Challenges & Risk Mitigation:

Policies of Indian Railways and the Government and allocation amount towards the Indian Railways could influence

26

the growth prospects of this business. Delayed cash-flow, could, apart from causing pressure on managing the working capital requirements, may also have an impact on the profitability of this business. With very high working capital requirements causing higher interest cost, the net profit margin of this business remains under check for the Company.

Company faces competition from major corporates as well as from unorganised sectors. In view of requirement of low capital expenditure in this business, there are always new entrants. Due to all these factors there is always threat on the price and market share.

Currently there is a shortage of skilled work force at Dehradun, to overcome this Company is training unskilled / semi skilled workforce and also trying for sourcing of components from neighbouring areas.

Some of the key risks identified and steps taken to mitigate the adverse impact of same are noted below:

lSupply Chain RiskIncrease in commodity prices has the effect of putting pressure on margins. Company has mitigated supply chain risk to a great extent through its inclusive strategy, rate negotiation with vendors, alternative sourcing, indigenisation of critical components and various other measures thereby leveraging the Company's ability to timely source components at competitive prices.

lForeign Exchange RiskA marginal part of Company's costs for procuring components from International markets are denominated in foreign currency. Unhedged trade and financial exposure thus creates potential to adversely impact our project and overall profitability. In the years to come, risk management practices shall continue to focus on minimising the economic impact on Company profitability arising from fluctuations in exchange rates.

lInterest rate riskCompany is exposed to interest rate fluctuation. Management is continuously involved in working out interest rate sensitivity and propositions to mitigate the interest rate risk.

lCredit riskCompany is exposed to debt, taken to fund its growth. Increased interest rates and credit squeeze continues to be a big challenge.

Focus on cost reduction, improved operational efficiencies and reduction in working capital deployment, is expected to help in reducing the liquidity pressure.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY:

Company's internal management audit team periodically undertake independent reviews of risks, controls, operations and procedures, identify control and process gaps and recommend business solutions for risk mitigation.

The Audit Committee of the Board periodically reviews the management audit reports, audit plans and recommendation of the auditors and management's response to those recommendations.

Growth Strategies & Thrust Areas:

Ensuring cost competitiveness, timely execution of projects within cost estimates, managing volatility, volatile foreign currency, control over working capital, achieving operational efficiency, improved supply chain management will be the key success factors to achieve the desired growth in the medium to long term. Initiatives are planned for improving the capacity utilisation and vendor development.

Human Resource Development / Industrial Relation:

Attracting and retaining talent with requisite competencies, especially for the emerging businesses and focus on training and development to improve productivity are key thrust areas for businesses to strengthen competitive advantage. Various initiatives have been planned for career planning, employee engagement, competency building and succession planning.

Company's senior management team has deep experience in the industries in which we operate. We believe that the experience of our management team in the domestic and international markets will help us to increase our penetration internationally and expand the range of our product offerings. Our management team also has long-standing relationships with many of our major customers. Our after sales support, training and other services are one of our main selling points.

For and on behalf of the Board of DirectorsFor Hind Rectifiers Limited


27

SECRETARIAL COMPLIANCE CERTIFICATE

COMPANY NO. 11-11077.

AUTHORISED SHARE CAPITAL : ̀ 10,00,00,000/-

PAID UP SHARE CAPITAL: ̀ 3,01,15,860/-

The Members,

M/s. HIND RECTIFIERS LIMITED

Lake Road,

Bhandup (West),

MUMBAI - 400 078.

We have examined the registers, records, books and papers of M/s. HIND RECTIFIERS LIMITED [ the Company ] as

required to be maintained under the Companies Act, 1956, (the Act) and the rules made there under and also the

provisions contained in the Memorandum and Articles of Association of the Company for the year ended on MARCH

31,2012. In our opinion and to the best of our information and according to the examinations carried out by me and

explanations furnished to us by the Company and its officers, we certify that in respect of the aforesaid financial year:

1) The Company has kept and maintained all registers as stated in ANNEXURE - 'A' to this certificate, as per the

provisions and the rules made there under and all entries therein have been duly recorded.

2) The Company has duly filed the forms and returns as required with the Registrar of Companies or other

authorities as prescribed under the Act and the rules made hereunder wherever applicable as per - ANNEXURE

- 'B'.

3) The Company being a Limited Company, Comments not required.

4) The Board of Directors duly met 5 [ FIVE ] times during the aforesaid Financial Year i.e. on 11/04/2011,

30/05/2011, 05/08/2011, 14/11/2011 and 13/02/2012 and in respect of each meeting proper notices were given

and proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

5) The Company closed its Register of Members during the financial year.

6) The Company held its Annual General Meeting during the year in time i.e. on AUGUST 5, 2011 and in respect of

which proper notice was given and proceedings were properly recorded and signed in the Minutes Book

maintained for the purpose.

7) No Extra Ordinary General Meeting was held during the financial year.

8) The Company has complied with the provisions of Section 293 (1) (d) of the Act.

9) The Company has not entered into contracts falling within the purview of Section 297 of the Act.

10) The Company has entered necessary particulars in the register maintained under Section 301 of the Companies

Act, 1956.

11) Wherever necessary, the Company has obtained necessary approval from the Board of Directors / Shareholders

under Section 314 of the Companies Act, 1956.

12) The Company has issued duplicate share certificates during the financial year and necessary compliances of the

Act were made.

13) The Company has:

i) delivered all the certificates on allotment of Shares in accordance with the provisions of the Companies Act,

1956.

ii) duly complied with the requirements of Section 217 of the Act.

iii) other clauses are not applicable.

14) The Board of Directors of the Company is duly constituted.

15) There was no appointment of Managing Director and Executive Director during the financial year.

28

16) The Company has not appointed any Sole Selling Agents during the financial year.

17) The Company was not required to obtain any approvals of the Company Law Board, Regional Director, Registrar

and/or such authorities prescribed under the various provisions of the Act during the financial year.

18) The Directors have disclosed their interest in other firms / companies to the Board of Directors pursuant to the

provisions of the Act and the rules made there under.

19) The Company has not issued or allotted any Equity Shares during the financial year and hence no compliances of

the Act were made.

20) The Company has not bought back any shares during the financial year.

21) The Company has not issued any preference shares / debentures and hence the question of redemption of

preference shares / debentures does not arise during the financial year under review.

22) There were no transactions necessitating the Company to keep in abeyance the rights of dividend, rights shares

and bonus shares pending registration of transfer of shares.

23) The Company has not accepted deposits during the financial year, but the Company has outstanding deposits

and in respect of those outstanding deposits, the Company has complied with the provisions of Section 58A of the

Companies Act, 1956.

24) The Company has complied with the provisions of Section 293 (1) (a) of the Act.

25) The Company has not made any loans or advances or given any guarantees or provided securities to other bodies

corporate.

26) The Company has not altered the provisions of the Memorandum with respect to situation of the Company's

Registered Office from the one state to another during the year under scrutiny.

27) The Company has not altered the provisions of the Memorandum with respect to the Object of the Company

during the year under scrutiny.

28) The Company has not altered the provisions of the Memorandum with respect to Name of the Company during

the year under scrutiny.

29) The Company has not altered the provisions of the Memorandum with respect to Share Capital of the Company

during the year under scrutiny.

30) The Company has not altered its Articles of Association during the year.

31) There was no prosecution initiated against or show cause notices received by the Company and no fines or

penalties or any other punishment has imposed on the Company during the financial year, for offences under the

Act.

32) The Company has not received any money as security from its employees during the financial year.

33) The Company was regular in depositing the Provident Fund dues during the year.

For GMJ & ASSOCIATESCompany Secretaries

[MAHESH SONI]PartnerFCS : 3706 ; COP : 2324.

Place : Mumbai.thDate : 30 May, 2012.

29

30

ANNEXURE - 'A' TO THE SECRETARIAL COMPLIANCE CERTIFICATE:

Name of the Company: M/s. HIND RECTIFIERS LIMITED.

DETAILS OF REGISTERS MAINTAINED:

Sr. No. Section Number Name of Register

1 108 Share Transfer Register

2 150 Register of Members

3 193 Minutes of all meetings of Board of Directors

4 193(1) Minutes of General Meetings

5 209 Books of Accounts

6 301 Register of Contracts

7 303 Register of Directors

8 307 Register of Directors Shareholdings

9 125/143 Register of Charge

10 – Register of Board Meeting and General Meeting Attendance Register

ANNEXURE - 'B' TO THE SECRETARIAL COMPLIANCE CERTIFICATE:

Name of the Company: M/s. HIND RECTIFIERS LIMITED.

DETAILS OF FORMS FILED WITH THE REGISTRAR OF COMPANIES:

Sr. No. Document / Under Section Filed on Whether Whetherfiled additional

in time fee paid

1 Form 62 Return of Deposit u/s. 58A 17/06/2011 Yes No

2 Form 20B Annual Return u/s. 159 29/09/2011 Yes No

3 Form 23 AC-XBRL & 23 ACA-XBRL Balance 30/12/2011 Yes NoSheet & Profit & Loss Account u/s. 220

4 Form 66 Secretarial Compliance Certificate u/s. 383A 30/08/2011 Yes No

5 Form 1 u/s. 205 [IEPF] 06/09/2011 Yes No

6 Form 23B 24/08/2011 N.A. N.A.

7 Form 32 09/05/2011 Yes No

8 Form 23 31/08/2011 Yes No

9 Form DIN 4 15/12/2011 Yes No

10 Form 8 22/02/2012 Yes No

11 Form 8 22/02/2012 Yes No

12 Form 8 24/10/2011 Yes No

13 Form 8 11/04/2011 Yes No

For GMJ & ASSOCIATESCompany Secretaries

[MAHESH SONI]PartnerFCS : 3706 ; COP : 2324.

Place : Mumbai.thDate : 30 May, 2012

AUDITORS' REPORT

TO THE MEMBERS OFHIND RECTIFIERS LIMITED

st1. We have audited the attached Balance Sheet of HIND RECTIFIERS LIMITED as at 31 March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. The financial statements of the branches audited by other Auditors are incorporated in the annexed Balance Sheet and the Statement of Profit and Loss. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination of those books and proper financial statements adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditor's Reports have been forwarded to us and have been appropriately dealt with;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited financial statements from the Branches;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) On the basis of the written representations received from the Directors of the Company as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with the Significant Accounting Policies and Notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

st(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2012;

(ii) in the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date;

and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.


Chartered Accountants,(Registration No.105069W)

(UDAY J. SHAH)Place : Mumbai Partner

stDate :31 May, 2012 Membership No. 033038

31

ANNEXURE TO AUDITORS' REPORT

(Referred to in paragraph 3 of the Auditors' Report of even date to the members of Hind Rectifiers

Limited on the financial statements for the year ended March 31, 2012)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and

situation of its fixed assets;

(b) As informed the fixed assets have been physically verified by the management at reasonable intervals; and

discrepancies noticed on such verification were not material and the same have been properly dealt with in

the books of account;

(c) The disposal of fixed assets during the year cannot be regarded as substantial and do not affect the going

concern assumption;

2. (a) As explained to us, Inventories (except stock lying with third parties, for which confirmations obtained in

respect of such inventory) have been physically verified during the year by the management;

(b) The procedures of physical verification of inventory followed by the management are reasonable and

adequate in relation to the size of the Company and the nature of its business;

(c) In our opinion, the Company is maintaining proper records of inventory. Discrepancies noticed on physical

verification were not material, and the same have been properly dealt with in the books of account;

3. According to information and explanations given to us, the Company has neither granted nor taken loans,

secured or unsecured, from parties covered in the register maintained under section 301 of the Act. Therefore,

the provisions of clause 4(iii) of the Order, are not applicable to the Company.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control

procedures commensurate with the size of the Company and the nature of its business with regard to purchase of

inventories and fixed assets and for sale of goods & services. We have not come across any major weakness in

internal control;

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or

arrangements that need to be entered in the register maintained under Section 301 of the Companies Act,

1956 have been so entered;

(b) According to the information and explanations given to us, there are no transactions of purchase of goods

and materials and sale of goods, materials and services exceeding ̀ 5,00,000/- during the year in respect of

each party made in pursuance of contracts or arrangements entered in the register maintained under

Section 301 of the Companies Act, 1956;

6. In our opinion and according to the information and explanations given to us, the Company has complied with the

provisions of Section 58A and 58AA of the Companies Act, 1956, and the Companies (Acceptance of Deposits)

Rules, 1975 with regard to the deposits accepted from public.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business;

8. According to the information and explanations given to us, the Company is in the process of preparing the Cost

Records pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central

Government under section 209(1) (d) of the Companies Act, 1956.

9. (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues

including Provident Fund (PF), Investor Education & Protection Fund, Employees' State Insurance (ESI),

Income-Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess and other statutory

dues with the Appropriate Authorities. According to the information and explanation given to us, there are

no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at st31 March, 2012 for a period of more than six months from the day they become payable;

32

33

(b) The disputed statutory dues aggregating ̀ 64.90 lacs, that have not been deposited on account of disputed

matters pending before Appropriate Authorities are as under:

Forum where dispute is pending Amount(` in lacs)

CEGAT - Central Excise & Gold (Control) 44.45Appellate Tribunal (Net of Deposit of ̀ 1.00 lac)

Income Tax before the C.I.T. (Appeals) - 22, Mumbai 16.74

Income Tax before the Appellate Tribunal, Mumbai 3.71(Net of payments and refunds

of ̀ 7.15 lacs)

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the financial

year covered by our audit and in the immediately preceding financial year;

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in

repayment of dues to banks;

12. According to the information and explanations given to us, the Company has not granted any loans and advances

on the basis of security by way of pledge of shares, debentures and other securities;

13. The provisions of any special statute applicable to Chit Funds, Nidhis or Mutual Benefit Funds / Societies are not

applicable to the Company;

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provisions

of Clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company;

15. In our opinion and according to the information and explanations given to us, the Company has not given

guarantees for loans taken by others from banks or financial institutions;

16. The Company has not taken any term loans during the year;

17. According to the Cash Flow Statement and other records examined by us and on the basis of information

and explanations given to us, on and overall basis, funds raised on short term basis have, prima facie, not

been used during the year for Long Term Investment;

18. The Company has not made any preferential allotment of shares during the year;

19. The Company has not issued any debentures during the year;

20. The Company has not raised any money by way of public issue during the year;

21. As per the information and explanations given to us, no material fraud on or by the Company has been

noticed during the year except fraud referred to in Note no. (xiv) of other notes on financial statements.


Chartered Accountants,(Registration No. 105069W)

(UDAY J. SHAH)Place : Mumbai Partner

stDate : 31 May, 2012 Membership No. 033038

Particulars Note As at As atMarch 31, 2012 March 31, 2011

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds

(a) Share Capital 1 301.16 301.16

(b) Reserves and Surplus 2 6,016.84 5,228.67

6,318.00 5,529.83(2) Non-current Liabilities

(a) Long-term Borrowings 3 20.10 19.21

(b) Other Long-term Liabilities 4 19.26 19.26

(c) Long-term Provisions 5 163.25 137.51

202.61 175.98(3) Current Liabilities

(a) Short-term Borrowings 6 1,459.96 682.70

(b) Trade Payables 7 1,590.13 1,031.92

(c) Other Current Liabilities 8 396.32 380.61

(d) Short-term Provisions 9 328.21 349.18

3,774.62 2,444.41

TOTAL 10,295.23 8,150.22

II. ASSETS

(1) Non-current Assets

(a) Fixed Assets 10

(i) Tangible Assets 1,486.09 1,419.89

(ii) Intangible Assets 106.09 141.55

(b) Deferred Tax Assets (Net) 11 59.93 43.08

(c) Long-term Loans and Advances 12 285.82 335.47

(d) Other Non-current Assets 13 142.00 54.00

2,079.93 1,993.99(2) Current Assets

(a) Inventories 14 1,915.71 1,789.97

(b) Trade Receivables 15 5,907.53 4,063.17

(c) Cash and Cash Equivalents 16 121.62 107.81

(d) Short-term Loans and Advances 17 270.44 195.28

8,215.30 6,156.23

TOTAL 10,295.23 8,150.22

Other Notes on Financial Statements 25

BALANCE SHEET AS AT 31ST MARCH, 2012

The accompanying notes form integral part of the financial statements.

As per our report attached For and on behalf of the Board of Directors

For KHANDWALA & SHAH S. K. NEVATIA, Chairman & Managing DirectorChartered Accountants V. K. BHARTIA, Director

Uday J. ShahPartner

Place : Mumbai Place : Mumbai st thDate : 31 May, 2012 Date : 30 May, 2012

(` in lacs)

34

The accompanying notes form integral part of the financial statements.



Uday J. ShahPartner


Particulars Note Year ended Year endedMarch 31, 2012 March 31, 2011

I. Revenue from Operations 18

Gross Operational Income 12,653.29 10,853.67

Less: Excise Duty / Service Tax 859.33 689.79

Net Operational Income 11,793.96 10,163.88

II. Other Income 19 24.10 18.23

III. Total Revenue (I + II) 11,818.06 10,182.11

IV. Expenses

Cost of Materials Consumed 20 7,630.42 6,359.70

Purchases of Stock-in-Trade 210.69 568.20

Changes in Inventories of Finished Goods,

Work-in-Progress and Stock-in-Trade 21 74.00 (209.89)

Employee Benefits Expense 22 1,388.49 1,281.55

Finance Costs 23 158.30 82.10

Depreciation and Amortization Expense 239.83 239.68

Other Expenses 24 908.38 698.79

Total Expenses 10,610.11 9,020.13

V. Profit Before Taxes (III - IV) 1,207.95 1,161.98

VI. Tax Expenses(1) Current Tax 244.00 234.00(2) Mat Credit Entitlement (88.00) (54.00)(3) Deferred Tax (16.85) (29.28)(4) (Excess) / Short Provision of Taxation for 0.62 (3.15)

Earlier Years 139.77 147.57

VII. Profit/(Loss) for the year (V - VI) 1,068.18 1,014.41

VIII.Basic & Diluted Earnings Per Share of face value of ` 2/- each. (Refer Note No. (xv) of Other Notes on 7.09 6.74Financial Statements)

Other Notes on Financial Statements 25

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2012(` in lacs)

35

Particulars Year ended Year endedMarch 31, 2012 March 31, 2011

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit/(Loss) Before Tax & Extra-Ordinary Items 1,207.95 1,161.98

Adjusted for

Depreciation 239.83 239.68

Investment Income (10.04) (7.23)

Interest Charged 158.30 82.10

Operating Profit before Working Capital Changes 1,596.04 1,476.53

Changes in

Trade & Other Receivables (1,866.70) (1,120.07)

Inventories (125.74) (412.29)

Trade & Other Payables 565.80 478.87

(1,426.64) (1,053.49)

Cash Generated from Operations 169.40 423.04

Direct Taxes Paid (248.17) (206.41)

Cash Flow before Extra-Ordinary Items (78.77) 216.63

Extra-Ordinary Items – –

Net Cash from Operating Activities (78.77) 216.63

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchases of Fixed Assets (281.61) (221.97)

Sale/Disposal of Fixed Assets 9.73 8.45

Purchases of Investments – –

Sale of Investments – –

Interest Received 9.53 7.75

Dividend Received – –

Net Cash used in Investing Activities (262.35) (205.77)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of Share Capital – –

Proceeds from Borrowings 778.15 359.03

Interest Paid (160.71) (99.26)

Dividend Paid (225.87) (210.81)

Tax on Distributed Profit (36.64) (35.83)

Net Cash used in Financing Activities 354.93 13.13

Net Changes in Cash & Cash Equivalents (A+B+C) 13.81 23.99

Cash & Cash Equivalents - Opening Balance 107.81 83.82

Cash & Cash Equivalents - Closing Balance 121.62 107.81

CASH FLOW FOR THE YEAR ENDED 31ST MARCH, 2012



Uday J. ShahPartner


(` in lacs)

36

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012

1. SHARE CAPITAL (` In lacs)

Particulars As at As atMarch 31, 2012 March 31, 2011

Authorised Capital

5,00,00,000 Equity Shares of ` 2/- each 1,000.00 1,000.00

Issued Capital

1,50,57,930 Equity Shares of ` 2/- each 301.16 301.16

Subscribed and Paid up

1,50,57,930 Equity Shares of ` 2/- each 301.16 301.16

TOTAL 301.16 301.16

a. 75,28,965 Shares out of Issued Subscribed and Paid-up Share Capital were alloted as bonus shares in the last five years by capitalisation of General Reserve

b. The details of shareholders holding more than 5% shares

Name of Shareholder As at March 31, 2012 As at March 31, 2011

No of shares % held No of shares % held

Shri. Sushil Kumar Nevatia 17,60,901 11.69 19,60,901 13.03

Smt. Uma Nevatia 15,23,100 10.12 16,73,100 11.11

Shri. Saurabh Nevatia 13,48,300 8.95 13,48,300 8.95

Westing House Brake & Signals Holdings Ltd. 24,00,000 15.94 24,00,000 15.94

c. Reconciliation of number of shares

Particluars Equity Shares

Number (` In lacs)

Equity Shares at the beginning of the year 1,50,57,930 301.16

Add: Shares Issued during the year – –

Less: Shares bought back during the year – –

Equity Shares at the end of the year 1,50,57,930 301.16

37

2. RESERVES AND SURPLUS (` in lacs)


General Reserve

Opening Balance 5,172.57 4,422.57

Add: Transferred from Statement of Profit & Loss 400.00 750.00

Closing Balance 5,572.57 5,172.57

Reserve for Capital Expenditure

Opening Balance – –

Add: Transferred from Statement of Profit & Loss 350.00 –

Closing Balance 350.00 –

Profit and Loss Account

Opening balance 56.10 54.20

Add: Profit for the year 1,068.18 1,014.41

Less: Appropriations

Transferred to Reserve for Capital Expenditure 350.00 –

Transferred to General Reserve 400.00 750.00


[Dividend per Share ̀ 1.60 (Previous Year ̀ 1.50)]

Tax on Dividend 39.08 36.64

1,030.01 1,012.51

Closing Balance 94.27 56.10

TOTAL 6,016.84 5,228.67

3. LONG-TERM BORROWINGS (` in lacs)


SECURED

Vehicle Loan from ICICI Bank Ltd.* 20.10 –

UN-SECURED

Fixed Deposits – 19.21

TOTAL 20.10 19.21

* Secured against hypothecation of Motor Car Nos. MH-03-AZ-6558, MH-03-AZ-6559, MH-03-AZ-6560, MH-03-AZ-6561, TN-01-AP-8368, MH-03-AZ-6531, MH-03-AZ-6589, MH-03-AZ-6590, MH-03-AZ-6724, MH-03-AZ-6725 and MH-03-AZ-6726.

4. OTHER LONG-TERM LIABILITIES (` in lacs)


Dealership Deposit 19.26 19.26

TOTAL 19.26 19.26

38

39

5. LONG-TERM PROVISIONS (` in lacs)


Provision for Employee Benefits

Gratuity 101.44 80.33

Leave Encashment 61.81 57.18

TOTAL 163.25 137.51

6. SHORT-TERM BORROWINGS (` in lacs)


SECURED

Working Capital Loans From Banks *

ICICI Bank Limited 877.02 330.58

Union Bank of India 582.94 352.12

TOTAL 1,459.96 682.70

* Working Capital Loans from Banks are secured by first charge against all movable and immovable assets both present and future situated at Bhandup, Mumbai and also by hypothecation of stocks and book debts of the Company ranking pari-passu in favour of ICICI Bank Ltd. and Union Bank of India.

7. TRADE PAYABLES (` in lacs)


Micro, Small and Medium Enterprises 106.18 58.08

Others 1,483.95 973.84

TOTAL 1,590.13 1,031.92

8. OTHER CURRENT LIABILITIES (` in lacs)


Current maturities of long term debt * 31.01 18.83

Advance from Customers 33.15 29.67

Interest accrued but not due 1.89 4.30

Unclaimed Deposits 2.25 4.00

Unclaimed Dividend 20.91 17.86

Other payables ** 307.11 305.95

TOTAL 396.32 380.61

* Includes

i) Loan for vehicles ̀ 15.30 lacs (Previous year ̀ Nil)

ii) Fixed Deposits ̀ 15.71 lacs (Previous year ̀ 18.83 lacs)

** Includes statutory dues and outstanding expenses

40

10. FIXED ASSETS (` in lacs)

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

As on Since Deduction/ As on As on For the Recouped, As on As on As on01-04-2011 Added Adjusted 31-03-2012 01-04-2011 Year sold or 31-03-2012 31-03-2012 31-03-2011

Adjusted

Tangible Assets

Land - Owned 161.41 – – 161.41 – – – – 161.41 161.41

Land - Leasehold 21.01 – – 21.01 7.15 0.22 – 7.37 13.64 13.86

Roads 54.24 – – 54.24 12.26 2.10 – 14.36 39.88 41.98

Buildings 597.93 159.18 – 757.11 137.99 46.00 – 183.99 573.12 459.94

Plant & Machinery 1,010.04 5.52 – 1,015.56 461.09 86.25 – 547.34 468.22 548.95

Motor Cars & Vehicles 146.39 93.02 21.15 218.26 70.61 36.57 10.48 96.70 121.56 75.78

Furniture & Fixtures 299.78 9.53 – 309.31 202.88 17.13 – 220.01 89.30 96.90

Computers 148.02 9.07 0.37 156.72 126.95 10.81 – 137.76 18.96 21.07

Total 2,438.82 276.32 21.52 2,693.62 1,018.93 199.08 10.48 1,207.53 1,486.09 1,419.89

Previous Year 2,267.99 202.03 31.20 2,438.82 842.94 197.79 21.80 1,018.93 1,419.89 –

Intangible Assets

Technical Knowhow & 319.11 – – 319.11 201.57 29.38 – 230.95 88.16 117.54Licence Fees

Computer software 32.27 5.29 – 37.56 8.26 11.37 – 19.63 17.93 24.01

Total 351.38 5.29 – 356.67 209.83 40.75 – 250.58 106.09 141.55

Previous Year 331.44 19.94 – 351.38 167.94 41.89 – 209.83 141.55 –

9. SHORT-TERM PROVISIONS (` in lacs)


Provision for Employee Benefits

Provision for Gratuity 0.76 48.22

Provision for Leave encashment 14.37 3.19

15.13 51.41

Others

Provision for Taxation 32.43 35.26

Provision for Wealth Tax 0.64 –


Tax on Proposed Dividend 39.08 36.64

313.08 297.77

TOTAL 328.21 349.18

11. DEFERRED TAX ASSET (NET) (` in lacs)


Deferred Tax Assets

Disallowance under the Income Tax Act, 1961 75.91 67.54

Deferred Tax Liability

Related to Fixed Assets 15.98 24.46

TOTAL 59.93 43.08

41

12. LONG-TERM LOANS AND ADVANCES (` in lacs)


Unsecured, Considered Good

Capital Advances 196.99 254.56

Security Deposits 28.62 22.25

Earnest Money Deposits 50.25 44.87

Staff Loans 9.84 13.79

Others 0.12 –

TOTAL 285.82 335.47

13. OTHER NON-CURRENT ASSETS (` in lacs)


MAT Credit Entitlement 142.00 54.00

TOTAL 142.00 54.00

14. INVENTORIES (` in lacs)


Raw Materials and Components 1,416.12 1,223.25

Work-in-Progress 242.45 341.66

Finished Goods 123.20 113.29

Stock-In-Trade 96.56 74.98

Stores and Spares 2.64 1.95

Loose Tools and Instruments 33.28 34.81

Scrap 1.46 0.03

TOTAL 1,915.71 1,789.97

(Refer Note No. (i) (e) of Other Notes on Financial Statements)

15. TRADE RECEIVABLES (` in lacs)


Trade receivables outstanding for a periodless than six months

Secured, considered good 7.77 6.37

Unsecured, considered good 5,185.83 3,547.38

Total 5,193.60 3,553.75

Trade receivables outstanding for a periodexceeding six months

Secured, considered good 2.73 1.53

Unsecured, considered good 711.20 507.89

Total 713.93 509.42

TOTAL 5,907.53 4,063.17

16. CASH AND CASH EQUIVALENTS (` in lacs)


Balances with banksIn Current Account * 36.01 39.38In Margin Account ** 77.87 47.62In Fixed Deposit 3.50 8.00Total 117.38 95.00

Cash on hand 4.24 12.81

TOTAL 121.62 107.81

* Balance with banks in current account includes Unclaimed Dividend of ̀ 20.91 lacs(Previous year ̀ 17.86 lacs)

** Balance in Margin money towards security for Letter of Credit and Letter of Guarantee

17. SHORT-TERM LOANS AND ADVANCES (` in lacs)


Unsecured, considered goodAdvances recoverable in cash or kind or for value to be received 146.51 108.81Earnest Money Deposits 34.49 16.35Balance with Excise, Customs and Port Trust 71.18 55.03Taxes Paid in Advance / Deducted at Source (Net of Provision for Tax) 12.25 10.90Interest Income accrued but not due 6.01 4.19

TOTAL 270.44 195.28

18. REVENUE FROM OPERATIONS (` in lacs)

Particulars Year Ended Year EndedMarch 31, 2012 March 31, 2011

Gross Sales 11,861.14 10,274.09Less: Excise Duty 810.73 634.72

11,050.41 9,639.37

Gross Reconditioning, Repairing & Servicing Income 792.15 579.58Less: Excise Duty/ Service Tax 48.60 55.07

743.55 524.51

TOTAL 11,793.96 10,163.88

19. OTHER INCOME (` in lacs)


Interest Income 11.35 8.18Credit Balances Written Back 12.49 0.18Sales Tax Refund – 1.33Exchange Fluctuation – 7.41Miscellaneous Receipts 0.10 0.50Duty Drawback 0.16 0.63

TOTAL 24.10 18.23

42

20. COST OF MATERIALS CONSUMED (` in lacs)


Opening Stock of Raw Materials 1,223.25 1,022.07

Add: Purchases of Raw Materials 7,520.78 6,321.01

Add: Conversion and Processing Charges 302.51 239.87

Total 7,823.29 6,560.88

Less: Closing Stock of Raw Materials 1,416.12 1,223.25

TOTAL 7,630.42 6,359.70

21. CHANGES IN INVENTORY OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE

(` in lacs)


Opening Inventory


Work-In-Progress 341.66 230.27


529.93 321.90

Closing Inventory


Work-In-Progress 242.45 341.66


462.21 529.93

Add/(Less) Excise duty on Finished Goods 6.28 (1.86)

(INCREASE) / DECREASE 74.00 (209.89)

22. EMPLOYEE BENEFITS EXPENSE (` in lacs)


Salaries, Wages, Gratuity and Bonus etc. 1,189.21 1,095.49

Contribution to Provident Fund, Superannuation,Employees State Insurance Scheme 101.87 96.81

Staff Welfare Expenses 97.41 89.25

TOTAL 1,388.49 1,281.55

43

44

23. FINANCE COSTS (` in lacs)


Interest on Bank Borrowings 112.35 50.34

Interest on Deposits & Loans 2.78 11.08

Other Interest 7.12 0.54

Bank Charges 36.05 20.14

TOTAL 158.30 82.10

24. OTHER EXPENSES (` in lacs)


Consumable Stores, Tools and Instruments 26.36 22.63

Electricity, Water and Fuel Charges 135.27 126.41

Packing 73.70 49.76

Repairs

To Machinery 10.78 7.09

To Building 12.35 21.20

To Other Assets 16.09 18.21

Repairing and Servicing Expenses 1.38 1.36

Rent 20.47 16.40

Rates and Taxes 3.98 3.21

Insurance 10.25 8.02

Travelling, Conveyance and Vehicle Expenses 186.63 136.76

Director’s Travelling, Conveyance and Sitting Fees 6.85 3.98

Printing and Stationery 23.24 17.49

Postage, Telegram and Telex 37.46 39.16

Advertisement and Publicity 8.48 8.21

Liquidity Damages 40.07 28.55

Commission 25.25 13.73

Legal and Professional Charges 46.71 40.08

Payment to Auditors 3.95 2.71

Transit Insurance and Freight 112.75 72.55

Bad Debts 29.74 4.57

Exchange Rate Fluctuation 1.47 –

Miscellaneous Expenses 75.15 56.71

TOTAL 908.38 698.79

i) Significant Accounting Policies

a) Basis of Preparation of Financial Statements

The financial statements are prepared and presented under the historical cost convention, on the accrual

basis of accounting and in accordance with the provisions of the Companies Act, 1956 (‘the Act’), and the

accounting principles generally accepted in India and comply with the accounting standards prescribed in

the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation

with the National Advisory Committee on Accounting Standards, to the extent applicable.

The financial statement are prepared and presented in the form set out in Part I and Part II of Revised

Schedule VI of the Act, so far as they are applicable thereto.

b) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in

India (Indian GAAP) requires management to make estimates and assumptions that affect the reported

amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of

the financial statements. The estimates and assumptions used in the accompanying financial statements

are based upon management’s evaluation of the relevant facts and circumstances as of the date of

financial statements which in management's opinion are prudent and reasonable. Actual results may differ

from the estimates used in preparing the accompanying financial statements. Any revision to accounting

estimates is recognised prospectively in current and future periods.

c) Fixed Assets / Intangible Assets

i) Fixed assets are carried at cost of acquisition less depreciation. Cost of fixed assets includes interest of

directly related loans upto the date of commissioning/installation.

ii) Expenditure during construction period incurred on the projects under implementation are treated as

pre-operative expenses pending allocation to the assets and are included under "Capital Work-in-

Progress". These expenses are apportioned to fixed assets on commencement of commercial

production. Capital Work-in-Progress is stated at the amount expended upto the date of Balance

Sheet.

iii) Intangible assets are recognized if it is probable that the future economic benefits that are attributable

to the assets will flow to the Company and cost of the assets can be measured reliably.

d) Depreciation

i) Depreciation on fixed assets is provided on written down value in the manner and at the rates as per

schedule XIV of the Companies Act, 1956.

ii) Technical know-how is amortized from the year in which commercial production commences on the

written down value method.

iii) Leasehold Land is amortised over the period of lease.

e) Valuation of Inventories

Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs

incurred in bringing the inventories to their present location and conditions.

i) Raw material is valued at cost or net realisable value whichever is lower. Cost is calculated by applying

the weighted average method.

ii) Work-in-progress, Finished Goods and Stock-in-Trade are valued at cost or net realisable value

whichever is lower.

iii) Scrap is valued at estimated selling price.

iv) Stores and Spares are valued at cost. Tools and Instruments are valued at book value.

45

25. OTHER NOTES ON FINANCIAL STATEMENTS AS AT, AND FOR THE YEAR ENDED 31ST MARCH, 2012

f) Revenue Recongnition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company

and the revenue can be reliably measured.

Sales

Net operational income comprises of sale of goods and reconditioning, repairing and servicing income.

Sale of goods is recognised on despatch to customers. Sale are stated net of Sales Tax. Sales excludes

captive consumption of materials.

Other Income

Interest income is accounted on accrual basis.

g) Foreign Currency Transactions

i) Transaction denominated in foreign currency are recorded at the rate of exchange prevailing at the

time of transaction.

ii) Current Liabilities / Assets not covered by forward contract are stated at the rates ruling at the year

end and any exchange difference arising on such transaction is dealt with in the Statement of Profit

and Loss.

iii) Transactions completed during the year are adjusted at the prevailing rates.

h) Research and Development

Research and Development expenditure of revenue nature is charged to revenue and capital expenditure

is treated as fixed assets.

i) Retirement and Other Employee Benefits

i) Provident Fund is a defined contribution scheme established under State Plan. The contributions to the

scheme are charged to Profit & Loss Account in the year when the contributions to the funds are due.

ii) Superannuation Fund is a defined contribution scheme and contribution to the scheme are charged to

the Profit & Loss Account in the year when contributions are made in respect of employees covered

under the scheme. The scheme is funded with Life Insurance Corporation of India.

iii) The Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all

employees. The Gratuity Plan provides a lumpsum payment to vested employees, at retirement or

termination of employment, an amount based on the respective employee's last drawn salary and the

years of employment with the Company. The liability in respect of employees is provided and

contributed to Life Insurance Corporation of India under Group Gratuity (Cash Accumulation) Scheme

except;

a) In case of Chairman cum Managing Director and Executive Vice Chairperson, in whose cases the

additional Gratuity liability in accordance with their terms of appointment, is provided in the books.

b) In case of Nashik and Dehradun Division it is provided on the basis of actuarial valuation.

iv) The Company has other long term employee benefits in the form of Leave Encashment. The liability in

respect of Leave Encashment is provided for on the basis of actuarial valuation made at the end of the

Financial Year. The aforesaid Leave Encashment is not funded.

v) The undiscounted amount of short term employee benefits expected to be paid in exchange for the

services rendered by the employees is recognised during the period when the employee renders the

services.

vi) Terminal Benefits:Compensation to employees who have opted for retirement under the Voluntary Retirement

Scheme and termination of services of the employees by the Company is charged to Profit & Loss

account in the year on actual basis.

vii) Actuarial gains / losses are recognised immediately to the Profit & Loss account.

46

47

j) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity

shareholders by the weighted average number of equity shares outstanding during the period.

ii) Estimated amount of contract remaining to be executed on account of Technical Know-How not provided for

` 150.03 lacs (Previous Year ̀ 151.18 lacs).

iii) Contingent Liabilities in respect of the following:(` in lacs)


Letters of credit opened by the bankers of the Company 91.69 98.15in favour of the third parties

Guarantee given by the banks to the third parties on 702.44 533.57behalf of the Company

Letter of Credit discounted with bank 68.27 –

Claims of Excise disputed by the Company 45.45 14.78

Claims of ESIC disputed by the Company – 14.73

Claims of Income Tax disputed by the Company 27.61 10.87

Non-performance of Export obligation 4.96 4.96

iv) Payment to Auditors:(` in lacs)


As Auditor 2.25 1.70

For Tax Audit 0.60 0.40

For Certification etc. 0.80 0.40

For out of pocket expenses 0.30 0.21

TOTAL 3.95 2.71

v) Employee Benefits:

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS 15) (Revised 2005) issued by

the Institute of Chartered Accountants of India, as required by the Standard, the following disclosures are

made.

Defined Contribution Plan:

Contribution for Defined Contribution Plan, recognised as expense for the year are as under:(` in lacs)

Particulars 2011-2012 2010-2011

Employer's Contribution to Provident Fund 43.71 39.71

Employer's Contribution to Superannuation Fund 19.68 15.76

Employer's Contribution to Pension Fund 20.47 18.91

48

Defined Benefit Plan:(` in lacs)

Gratuity Leave Encashment

2011-2012 2010-2011 2011-2012 2010-2011

i) Reconciliation of opening and closingbalances of Defined Benefit obligation

Defined Benefit obligation atbeginning of the year

Funded 445.10 384.03 – –

Non-Funded 80.33 70.28 60.37 53.65

525.43 454.31 60.37 53.65

Current Service Cost

Funded 4.73 14.59 – –

Non-Funded 4.52 4.02 22.88 18.67

9.25 18.61 22.88 18.67

Interest Cost

Funded 36.72 30.72 – –

Non-Funded 2.01 1.32 4.72 4.03

38.73 32.04 4.72 4.03

Actuarial (gain) / loss

Funded 5.92 84.13 – –

Non-Funded 5.06 5.38 23.56 15.96

10.98 89.51 23.56 15.96

Benefits paid

Funded 103.42 68.37 – –

Non-Funded - 0.67 35.35 31.94

103.42 69.04 35.35 31.94

Defined Benefit obligation at year end

Funded 389.05 445.10 – –

Non-Funded 91.92 80.33 76.18 60.37

480.97 525.43 76.18 60.37

ii) Reconciliation of opening and closingbalances of fair value of plan assets(Funded)

Fair value of plan assets at beginningof the year 396.88 400.15 – –

Expected return on plan assets 33.49 34.25 – –

Actuarial (gain) / loss 1.98 (1.67) – –

Employer contribution 53.80 29.18 – –

Benefits paid 103.42 68.37 – –

Fair value of plan assets at year end 378.77 396.88 – –

Actual return on plan assets 31.51 35.92 – –

49

(` in lacs)

Gratuity Leave Encashment

2011-2012 2010-2011 2011-2012 2010-2011

iii) Expense recognised during the year

Current Service Cost

Funded 4.73 14.59 – –

Non-Funded 4.52 4.02 22.88 18.67

9.25 18.61 22.88 18.67

Interest Cost

Funded 36.72 30.72 – –

Non-Funded 2.01 1.32 4.72 4.03

38.73 32.04 4.72 4.03

Expected return on plan assets

Funded 33.49 34.25 – –

Non-Funded – – – –

33.49 34.25 – –

Actuarial (gain) / loss

Funded 7.90 82.46 – –

Non-Funded 5.06 5.38 23.56 15.96

12.96 87.84 23.56 15.96

Net Cost

Funded 15.86 93.52 – –

Non-Funded 11.59 10.72 51.16 38.66

27.45 104.24 51.16 38.66

st stAs at 31 March As at 31 March

2012 2011 2012 2011

iv) Reconciliation of fair value of assetsand obligations

Fair value of plan assets

Funded 378.77 396.88 – –

Non-Funded – – – –

378.77 396.88 – –

Present value of obligation

Funded 389.05 445.10 – –

Non-Funded 91.92 80.33 76.18 60.37

480.97 525.43 76.18 60.37

Amount recognised in Bal. Sheet

Funded 10.28 48.22 – –

Non-Funded 91.92 80.33 76.18 60.37

102.20 128.55 76.18 60.37

50

Gratuity Leave Encashmentst stAs at 31 March As at 31 March

2012 2011 2012 2011

v) Investment Details Insurer Managed Funds N.A.

vi) Actuarial assumptions

Mortality Table (LIC) 1994-96 (Ultimate) 1994-96 (Ultimate)

Discount rate (per annum) 8.50% 8.25% 8.50% 8.25%

Expected rate of return on planassets (per annum) 9% 9% – –

Rate of escalation in salary(per annum) 8% 6% 8% 6%

vi) Trade Receivables over six months comprises of ` 624.89 lacs (Previous year ` 434.44 lacs) due from

Government concerns and ̀ 89.04 lacs (Previous year ̀ 74.98 lacs) due from commercial parties.

vii) In the opinion of the Management, the current assets, loans and advances are approximately of the values

stated if realised in the ordinary course of business and all provisions for laibilities are adequate and not in

excess of the amount considered necessary.

viii) In view of the deductions available under section 80 IC of the Income Tax Act, 1961 to the Company, provision

for Income Tax of ` 244.00 lacs has been computed on the basis of Minimum Alternative Tax (MAT) in

accordance with section 115JB of the Income Tax Act, 1961. Considering the future profitability and taxable

position in the subsequent years, the Company has recognised MAT Credit Entitlement of

` 88.00 lacs as an asset by crediting the Profit & Loss Account for an equal amount and disclosed the same

under the head Other Non-Current Assets in accordance with the Guidance Note on "Accounting for Credit

available in respect of Minimum Alternative Tax under the Income Tax Act, 1961" issued by the Institute of

Chartered Accountants of India.

ix) In the opinion of the Management, no provision is required against contingent liabilities referred hereinabove.

x) Balance of Trade Receivables and Trade Payables are subject to confirmation.

xi) The details of amounts outstanding to Micro, Small and Medium Enterprises based on available information

with the company is as under:(` in lacs)


Principal amount due and remaining unpaid – –

Interest due on above and unpaid interest – –

Interest paid – –

Payment made beyond the appointed day during the year – –

Interest due and payable for the period of delay – –

Interest accrued and remaining unpaid – –

Amount of further interest remaining due and payable in – –succeeding years

51

xii) The recurring expenditure of ` 28.06 lacs (Previous year ` 19.97 lacs) spent in respect of Research and

Development during the year have been debited to respective expense account.

xiii) At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash

generating unit to determine whether there is any indication that those assets were impaired. However, in the

opinion of the management, there is no impairment of assets as on the balance sheet date.

xiv) During the year a fraud amounting to ̀ 24.00 lacs approximately committed by an employee Mr. A. R. Biswas

of Kolkata branch was noticed. Services of the said employee since, has been terminated and legal action has

been initiated against him. The necessary accounting treatment for recovery/loss will be given in the year of

settlement.

xv) Earnings per Share :(` in lacs)


Profit after taxation as per Statement of Profit & Loss 1,068.18 1,014.41

Weighted average number of equity shares outstanding 1,50,57,930 1,50,57,930

Basic and diluted earnings per share 7.09 6.74

xvi) Segment Information :

The Company has identified its Business Segments as its Primary Segments comprising of Electronic

Components and Equipments.

Primary Segment Information :(` in lacs)


A. Segment Revenue

Electronic Components 1,593.72 2,357.79

Equipments 10,672.26 8,515.68

Total 12,265.98 10,873.47

Less : Inter-Segment Revenue 472.02 709.59

Net Sales/ Income from Operations 11,793.96 10,163.88

B. Segment Results - Profit/(Loss)

Electronic Components 170.32 415.49

Equipments 1,567.26 1,178.83

Total 1,737.58 1,594.32

Less : Interest & Financial Charges 158.30 82.10

Other Unallocable Expenditure 371.33 350.24(Net of unallocable Income)

Profit Before Tax 1,207.95 1,161.98

C. Capital Employed

Electronic Components 610.58 743.90

Equipments 4,770.28 4,092.27

52

xvii) Related Party disclosures under Accounting Standard-18:

a) List of related parties

Name of Related Party Relationship

Shri S. K. Nevatia Key Management Personnel

Smt. Uma Nevatia Key Management Personnel

Shri Saurabh Nevatia Relative of Key Management Personnel

Smt. Surabhi Golyan Relative of Key Management Personnel

Shri Bharat Swaroop Relative of Key Management Personnel

b) Transactions during the year(` in lacs)

S.No. Nature of transaction Key Relative of TotalManagement Key Management

Expenditure

i. Interest paid – – –(1.14) (0.27) (1.41)

ii. Remuneration 81.82 20.83 102.65(79.95) (8.19) (88.14)

iii. Directors Sitting Fees – 0.25 0.25– (0.10) (0.10)

iv. Rent – 3.90 3.90– (3.90) (3.90)

(*) Figures in bracket represent previous year's amount.

xviii) Particulars of Sales:(` in lacs)


a) Manufactured Goods

Rectifier Stacks & Apparatus 1,735.05 1,546.82

Discrete Semi conductor Devices 742.89 788.11

Silicon Rectifier Apparatus 4,496.00 3,124.23

Convertor & Invertor Equipments 3,526.92 2,902.57

Others 258.94 556.25

Total 10,759.80 8,917.98

b) Traded Goods

Fuses and Microswitches 7.79 4.64

Semiconductor Devices – 349.34

Capacitors 277.46 358.01

Others 5.36 9.40

Total 290.61 721.39

TOTAL 11,050.41 9,639.37

53

xix) Particulars of Purchase of Stock-In-Trade:(` in lacs)


Fuses and Microswitches* 6.92 7.50

Semiconductor Devices** 20.13 348.49

Capacitors*** 193.76 254.25

Others 3.54 0.87

TOTAL 224.35 611.11

Includes purchases for manufacturing:

* ` 0.63 lacs (Previous year ̀ 0.90 lacs)

** ` 7.65 lacs (Previous year ̀ 5.83 lacs)

*** ` 5.38 lacs (Previous year ̀ 36.18 lacs)

xx) Particulars of Consumption of Raw Materials:*(` in lacs)


Non-ferrous metals 1,824.76 1,553.84

CRGO lamination 468.42 467.37

Electrical accessories and semi conductor components 2,581.42 2,741.36

Others 2,755.82 1,597.13

TOTAL 7,630.42 6,359.70

* Raw materials consumed:

i) Includes material used for service activities.

ii) Excludes sale and stock of scrap.

iii) Others include Conversion and Processing charges ̀ 302.51 lacs (Previous Year ̀ 239.87 lacs)

xxi) Consumption of Imported Raw Materials, Components and Spare Parts:(` in lacs)

Particulars Year Ended March 31, 2012 Year Ended March 31, 2011

Amount Percentage Amount Percentage

Imported 1,356.67 17.78 1,402.42 22.05

Indigenous 6,273.75 82.22 4,957.28 77.95

TOTAL 7,630.42 100.00 6,359.70 100.00

xxii) Value of Imports on C.I.F Basis:(` in lacs)


Raw Materials & Components 1,847.19 1,743.02

Capital goods – –

TOTAL 1,847.19 1,743.02

54


For KHANDWALA & SHAH S. K. NEVATIA, Chairman & Managing Director

Chartered Accountants V. K. BHARTIA, Director

Uday J. Shah

Partner


xxiii) Expenditure in foreign currency (on payment basis):(` in lacs)


Travelling Expenses 6.94 4.88

Technical Know-How, Licence Fee (shown under Capital advance) 43.08 –

Royalty – –

Others – –

TOTAL 50.02 4.88

xxiv) Earnings in foreign currency:(` in lacs)


Export on F.O.B. basis 55.57 43.84

Others – –

TOTAL 55.57 43.84

xxv) Dividend paid abroad:


Remittance of foreign exchange on account of dividend (` in lacs) 36.00 33.60

Number of non-resident shareholders 1 1

Number of shares on which remittance was made 24,00,000 24,00,000

Year for which the dividend was remitted 2010-2011 2009-2010

stxxvi) Till the year ended 31 March, 2011, the Company was using the pre-revised Schedule VI to the Companies stAct, 1956, for preparation and presentation of its Financial Statements. During the year ended 31 March,

2012 the Revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company.

Accordingly previous year's figures has been re-classified and re-grouped to confirm to this year.

HIND RECTIFIERS LIMITEDRegistered Office : Lake Road, Bhandup (W), Mumbai 400 078

ATTENDANCE SLIP

To be handed over at the entrance at the Meeting Hall.

I hereby record my presence at the FIFTY FOURTH ANNUAL GENERAL MEETING held at M. C. Ghia th

Hall, 4 Floor, Hargovindas Building, , K. Dubhash Marg, Kala Ghoda, Fort, Mumbai - 400 001 (India) on Tuesday, 7th August 2012 at 3.30 p.m.

Folio/DPID No. ___________________________

__________________________________Name of the Shareholder (in Block Letters)

______________________________Name of the Proxy (in Block Letters)

(To be filled in if the proxy attends instead of the member)

SIGNATURE OF THE SHAREHOLDER OR PROXY

______________________________________

18/20

HIND RECTIFIERS LIMITEDRegistered Office : Lake Road, Bhandup (W), Mumbai 400 078

PROXY FORM

I/We ____________________________________ of ____________________________________

being a Members of Hind Rectifiers Ltd. hereby appoint __________________________________

of __________________________________ or failing him _______________________________

of __________________________________ or failing him _______________________________

of __________________________________ as my / our proxy to attend and vote for me/us and on

my / our behalf at the FIFTY FOURTH ANNUAL GENERAL MEETING of the said Company to be held at th3.30 p.m. on Tuesday, 7 August, 2012 and at any adjournment thereof.

Signature this________________ day of _______________ 2012

Signature (s) of the Shareholder(s)

N.B.: (i) THIS FORM MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN FORTYEIGHT HOURS BEFORE THE TIME OF THE MEETING.

(ii) A PROXY NEED NOT BE A MEMBER

AffixRevenueStamp

ANNEXURE ''II" TO THE DIRECTOR'S REPORT

STATEMENT OF PARTICULARS UNDER SECTION 217(2A)OF THE COMPANIES ACT,1956 FOR THE YEAR ENDED 31ST MARCH 2012

SR. NAME DESIGNATION REMUNE- -

NO. RATION NET CATION/ JOINING (YRS.) LAST EMPLOYMENT

GROSS EXPERIENCE COMPANY & PERIOD

(` in Lacs) (` in Lacs) THE LAST POST (YEARS)

1 SHRI S.K. NEVATIA CHAIRMAN & 64.67 37.23 M.I.B.M. 25.04.1958 80 MUKUND LTD. 5

MANAGING (LONDON) EXECUTIVE

DIRECTOR 58 YEARS

Notes:

1. Gross remuneration includes Salary & cost of other perquisites calculated on the basis of rules prescribed in this behalf by the Department of Company Affairs and includes Company's contribution to Provident Fund.

2. None of the employees is drawing remuneration at the rate which in the agregate is in excess of that drawn by the Chairman & Managing Director and who holds by himself or alongwith his spouse or dependent children not less than 2% of the Equity shares of the Company.

For and on behalf of the Board of Directors

For Hind Rectifiers Limited

Mumbai S. K. NevatiathDated: 30 May, 2012 Chairman & Managing Director

RECEIVED QUALIFI DATE OF AGE PARTICULARS OF THE

3 PHASE ELECTROSTATIC PRECIPITATOR TRANSFORMER RECTIFIER UNIT

COMPACT HIGH FREQUENCY ELECROSTATIC PRECIPITATOR POWER SUPPLY UNIT WITH BUILT-IN HIGH VOLTAGE TRANSFORMER RECTIFIER SET AND CONTROLLER

FUTURISTIC PRODUCTS

PRESENT MANUFACTURING CAPACITY OF 380 NOS. PER MONTH OF HIGH VOLTAGE ELECTROSTATIC PRECIPITATORS AT MUMBAI, DEHRADUN AND NASHIK

PLANTS WITH STATE OF THE ART TEST FACILITIES

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C G H O NOL ET - Hind Rectifiers Ltd. · NOTICE TO THE MEMBERS NOTICE is hereby given that the 54th...

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